Ensure Proper Valuation of Assets

 
 
By Bob Pearlman and Bob Strasser  |  Posted 2009-02-12 Email Print this article Print
 
 
 
 
 
 
 


5. Ensure proper valuation of assets

Business plans may change in an uncertain economy. Therefore, the fair value or estimated lives of intangible assets may change as well. Stock options and other compensation strategies may also need to be adjusted in order to retain key employees. If a company is looking to make a strategic acquisition in the downward market, the target's lower valuations should be capitalized upon. Be aware, as well, for potentially-impaired assets caused by lower valuations related to the overall market, as well as acquisition opportunities created by these same market forces.

6. Evaluate all functional areas for efficiency

Sometimes it is essential to step back from the day-to-day tasks and duties to assess what adjustments are needed to correspond to the changing business environment. This is an excellent time to reevaluate the amount of administrative and production labor required to adequately maintain a healthy level of operations. Strategic "rightsizing" can be a very valuable tool in this type of economic environment.

7. Monitor outsourcing contracts

In an economic downturn, technology companies often turn to outsourcing in hopes of delivering cost savings. However, in order to be successful, outsourced activities should be well-monitored. They should have clearly-defined objectives, preliminary due diligence, defined measurement, defined measurement matrixes and contingency plans. In addition, the current downturn in the economy will require a periodic assessment of the financial health of the company's key suppliers and vendors.

8. Assess current technology and product line

Now, more than ever, technology companies must monitor their inventory levels to ensure that a newer, better technology has not been released that renders their current inventory obsolete. Controls should be instituted that call for constant calculations of inventory movement so that management can adequately respond to changes in market conditions and technology.

Bob Pearlman and Bob Strasser are Partners in the Technology Practice of BDO Seidman, LLP. A national accounting firm, BDO Seidman provides assurance, tax, financial advisory and consulting services. Based in Los Angeles, Bob Pearlman can be reached at bpearlman@bdo.com. Based in San Jose, Bob Strasser can be reached at rstrasser@bdo.com.

Disclosure: Material discussed in this byline article is meant to provide general information and should not be acted on without obtaining professional advice appropriately tailored to your individual needs.



 
 
 
 
Bob Pearlman and Bob Strasser are Partners in the Technology Practice of BDO Seidman, LLP. A national accounting firm, BDO Seidman provides assurance, tax, financial advisory and consulting services. Based in Los Angeles, Bob Pearlman can be reached at bpearlman@bdo.com. Based in San Jose, Bob Strasser can be reached at rstrasser@bdo.com.
 
 
 
 
 
 
 

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