Tax Symposium on the Valuation of Intangibles and Employee Stock Options
Pillsbury Winthrop, LLP.
and
Transfer Pricing Valuation Institute
(University of Washington School of Law Graduate Program in Taxation)
Thursday and Friday, March 3rd and 4th, 2005
Pillsbury Winthrop, LLP Silicon Valley office
2475 Hanover Street, Palo Alto, CA 94304-1114
Office: 650-233-4500, Fax: 650-233-4545
14 CLE/CPE credits for California approved
Register online at UW CLE
The IRS Associate Chief Counsel (International) Hal Hicks has recently described upcoming transfer pricing guidance on cost sharing and services. These forthcoming regulations address controversial issues related to the valuation of intangibles within the context of cost sharing buy-in payments and activities involving services. In addition, last year the IRS released final regulations on cost sharing and stock options (T.D. 9088 issued August 25, 2003). As you may be aware, there is significant interest and controversy associated with these newly released final regulations; the timing of the final regulations also coincides with recent updates to FAS 1232 that will affect how companies account for stockbased compensation in financial statements under GAAP. The potential impact of these regulations is significant for multinational firms, particularly for hightech firms that compensate employees with stock-based compensation.
Program Highlights
- Review economic and legal foundations of non-routine contributions and intangibles, referenced in the recent updates to the section 482 regulations
- Explain economic models for valuing employee stock options and review the controversial tax and GAAP issues
- Reconciling top-down and bottom-up valuation approaches for intangibles, including controversy and confusion caused by the market-cap method
- Learn to carefully word intercompany license agreements in order to minimize controversy with tax authorities
- Reconcile tax and GAAP treatments of intangible valuations and avoid potential conflicts with existing tax transfer pricing arrangements
- Provide perspectives on the use of in-house versus independent economists in transfer pricing projects
- Learn how Sarbanes-Oxley affects planning for and administration of transactions involving intangibles
Program Chairpersons
David F. Andrade, Ph.D. – Dr. Andrade is a recognized expert in the economics of transfer pricing and intellectual property and has been engaged as an expert consultant and testifying expert on many transfer pricing and tax valuation issues. Dr. Andrade is Director of the Transfer Pricing Valuation Institute and Assistant Professor of Law & Economics at the University of Washington School of Law, where he teaches courses and performs research in transfer pricing, taxation/valuation of intangibles and economic policy issues associated with intellectual property. Dr. Andrade received his Ph.D. in economics from the University of California at Davis. |
William E. Bonano, Esq. – Mr. Bonano's practice focuses on transfer pricing and international tax and he has significant experience with transfer pricing controversies. Mr. Bonano advises clients on transfer pricing and international tax issues including: cost sharing, technology transfer, section 6662 documentation, APAs, permanent establishment, debt vs. equity, foreign withholding, research credit, and other related issues. Before joining Pillsbury Winthrop LLP, Mr. Bonano was an International Special Trial Attorney with the Office of Chief Counsel, Internal Revenue Service, in San Francisco. Mr. Bonano received his J.D. from the University of Washington. |
Program Schedule - Thursday, March 3, 2005
Economic definitions, including what gives rise to an intangible asset versus non-routine contribution.
Legal definitions, including regulatory definitions, intellectual property and other definitions.
The role of intercompany contracts between controlled affiliates in minimizing controversy.
Review of bottom-up (such as DCF) and top-down (such as market capitalization) valuation approaches.
Tax and GAAP treatments of acquired intangibles as well as implications for transfer pricing arrangements.
Reconciling the market capitalization method to other valuation methods used for cost sharing buy-ins.
Perspectives on engaging economists for valuation and transfer pricing projects under Sarbanes-Oxley.
Program Schedule - Friday, March 4, 2005
Intangible valuation modeling frameworks that measure sources of value in presence of uncertainty.
Stock options and transfer pricing: updates on final cost sharing regulations and recent OECD study.
Overview of employee stock options and valuation modeling parameters.
Accounting for employee stock option expenses using different valuation models and assumptions.
Basic outlines of mandatory expensing: incremental improvements to modified grant-date method.
Program Speakers
Baruch Lev, Ph.D. – Frequently cited and published in publications such as the Wall Street Journal, Business Week, Fortune and more, Dr. Lev is the Philip Bardes Professor of Accounting and Finance at New York University, Stern School of Business, the Director of the Vincent C. Ross Institute for Accounting Research and the Project for Research on Intangibles. Professor Lev's research spans three books and about 75 research studies published in the leading accounting, finance and economic journals. This research concerns the optimal use of information in investment decisions; business valuation issues; corporate governance; and recently intangible investments (intellectual capital). In particular, the measurement, valuation and reporting issues concerning intangible investments. He lectures internationally and works closely with such institutions as the Securities and Exchange Commission, the Financial Accounting Standards Board, OECD, the European Union, and the Brookings Institution.
Mark Rubenstein, Ph.D. – Dr. Rubinstein is the Paul Stephens Professor of Applied Investment Analysis at the Haas School of Business at the University of California at Berkeley. He is a graduate of Harvard University, Stanford University and the University of California at Los Angeles. Professor Rubinstein is renowned for his work on the binomial options pricing model (also known as the Cox-Ross-Rubinstein model) as well as his early work on asset pricing in the 1970s. His publications include the books Options Markets and Rubinstein on Derivatives, as well as more than 50 publications in leading finance and economic journals. He is currently an associate editor of eight journals in these areas. In 1993, he served as President of the American Finance Association. Many of Rubinstein's papers are frequently reprinted in survey publications, and he has won numerous prizes and awards for his research and writing on derivatives including International Financial Engineer of the Year for 1995. Most recently, he won the Graham and Dodd award for 2002 for the best article published during the year 2001 in the Financial Analysts Journal.
Marios Karayannis, Ph.D. – Dr. Karayannis is a Partner and lead economist with PwC in San Jose where he has responsibility for transfer pricing projects involving high-tech silicon valley clients. Dr. Karayannis received his Ph.D. in economics from the University of Virginia.
David G. Chamberlain, Esq. – Mr. Chamberlain is an independent Silicon Valley consultant who specializes in accounting and tax treatment of employee stock options, transfer pricing and international tax issues. Mr. Chamberlain has over 10 years of relevant experience in Silicon Valley.
Avinash Verma, Ph.D. – Dr. Verma is an
independent economist who specializes in option
pricing, valuation and corporate finance issues. Dr.
Verma teaches related courses at Boston University
and has taught at the University of California at
Berkeley. Dr. Verma received his Ph.D. in finance
from the University of California at Berkeley.
