Comment 18 AAA

Mr. Bruce Bingham International Valuation Standards Committee Re: Discussion Paper “Determination of Fair Value of Intangible Assets for IFRS Reporting Purposes” Dear Bruce: Let me first express my appreciation to the IVSC for taking on this challenging assignment. While there is a large body of tax case law and tax literature relating to the valuation of intangible assets, the accounting literature is very thin in this area. And since the FASB and IASB have turned toward principles-based statements, and away from rules-based statements, guidance such as this discussion paper will be very beneficial to the advisor and preparer community. I was also happy to see that the discussion paper begins with a thorough discussion of the International Financial Reporting Standards which address the initial recognition of intangible assets arising from a business combination, and their subsequent measurement for impairment testing purposes. This serves to orient the reader to the principles established by the accounting standard setters for the measurement of the fair value of the assets. There are aspects of the discussion paper, however, which my collegues at American Appraisal Associates and I feel require further thought and clarification. I will try to address them in the same order in which they appear in the paper. Paragraph 2.2 We agree that there are elements of SFAS 157, such as the discussion of the Principal (or Most ...