409A Valuations — Are You Pricing Your Options Too High?
Start-up CFOs are fast realizing how early stage 409A valuations completed by quick cookie cutter, ‘textbook’ approach often result in inflated option prices and disgruntled emp
NOLs & Built-in Capital Gains (IRC382)
Valuation expertise and objective advice to simplify your tax planning process.
IRC382 limits the utilization of corporate NOLs against profits in the event of an “ownership change”, hence is of critical importance for corporations with significant NOLs.
An ownership change is defined as more than 50% change in ownership of stock involving 5% shareholders within three year period, occurring as a result of a merger, significant funding or other shifts in equity ownership structure. However, this change in ownership has to be calculated in terms of the fair market value and not the % of equity stake held based on outstanding shares.
In order to assess the availability of NOLs under IRC 382, companies need to conduct a detailed analysis of changes in capital and ownership structure over a three-year period as well as valuation of the company at different dates. Given the complexities involved, companies should be cautious in relying on rough estimations and other short cuts to determine applicability of IRC 382.
Aranca’s in-depth understanding of tax provisions, extensive experience of dealing with complex capital structures and expertise in business valuation services helps companies to deal with the challenges posed by IRC 382.
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Knowledge Library
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Founder’s Stock Sale — How Not to Turn it Into a 409A Nightmare
A Founders’ Stock sale can have serious and far reaching implications on the pricing of stock options due to 409A provisions. While the extent of t
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Demystifying IFRS “Fair Value” Issues: How CFOs of unlisted entities in KSA should gear themselves up?
Kingdom of Saudi Arabia (KSA) has now joined a set of 130+ countries in the implementation of IFRS for listed companies. The adoption of IFRS in
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Is the common share of a start-up really worth so much?
In the case of early stage start-ups, valuation appraisers, using the prescribed method, always come up with a common share valuation, which is invariably far
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Are business valuation approaches lagging behind?
The finance world has been using the same methods to value businesses for a long time now. While the business world has changed significantly, valuation
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Technology Sector Reports
Technology sector reports are a collection of quarterly reports containing analysed data on tech fundings, M&As, and IPOs. We have covered Ad & Marketing tech,
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How to Get the Most Out of IP Financing
The use of intellectual property as collateral to obtain finance is an increasingly common phenomenon. Over the past three decades, the proportion of tangible assets
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A decade later, most Indian internet companies are as far from an IPO as when they started off
“The barriers to entry in several internet businesses are really low,” Aranca’s Mantena said. “Any competitor can come at any time and start the same bu
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Oman to reap revenues from new VAT system
As GCC countries start looking at the real impact of the coming Value Added Tax (VAT), planned for the beginning of 2018, the country of Oman
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Modi’s surprise move on rupee notes has come as a pleasant surprise indeed for Indian internet startups
The Narendra Modi government’s decision to replace the Rs500 and Rs1,000 denomination notes with new ones has done in two days what Indian internet s