EXCHANGE-TRADED FUNDS – Illiquid Security Valuation
Exchange-Traded Funds (ETFs) are investment funds that combine the features of a mutual fund and a closed-end fund. ETFs trade throughout the day at prices that may be above or below the fund’s net asset value. Shareholders may trade shares of the ETF resulting in capital gains or losses. Additionally, shareholders are entitled to a […]
Surprise – Director Comp Must Be Fair
Stockholder approval of an incentive plan is not a foolproof defense against an “entire fairness review” of self-compensation decisions, as the Citrix Systems, Inc. (“Citrix”) board of directors learned the hard way. In Calma v. Templeton et al, a recent derivative action on behalf of Citrix, a stockholder challenged awards of restricted stock units (“RSU”) […]
ASC 350 Intangibles – Goodwill and Other: Goodwill Impairment for Financial Reporting and Step Zero Test
Overview Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350 provides guidance on financial accounting and reporting related to goodwill and other intangibles for U.S. GAAP, other than the accounting at acquisition for goodwill and other intangibles acquired in a business combination or an acquisition by a not-for-profit entity.Per ASC 350, originally issued […]
Houlihan Capital’s whitepaper on ESOPs
What is an ESOP? An Employee Stock Ownership Plan (“ESOP”) is a defined contribution retirement plan, authorized by the Employee Retirement Income Security Act (“ERISA”) similar to a profit sharing plan. Passed by Congress in 1974, ERISA provides tax incentives to establish ESOPs in accordance with the Department of Labor (“DOL”) and Internal Revenue Service […]
Going Private vs. Going Dark
Public companies are required to comply with United States Securities and Exchange Commission (SEC) filings and regulations. On average, public companies can spend anywhere from $1million to$3 million per year more than similar private companies due to regulatory and financial reporting costs. Studies have shown that public companies spend more on investor relations personnel, board […]