Bankruptcy & Fresh‑Start Valuation
When a business undergoes bankruptcy or reorganization, accounting rules often require a fresh‑start valuation — where the restructured entity’s assets and liabilities are remeasured to fair value at the emergence date. This process is complex, under stringent accounting, tax, and legal regimes.
Synpact Consulting provides specialized Bankruptcy & Fresh‑Start Valuation services designed to support businesses, creditors, auditors, and restructuring advisors. Our approach ensures valuations that are defensible, compliant, and aligned with regulatory and legal frameworks.
We work with distressed and reorganizing entities to value assets, liabilities, contingencies, and residual equity in a manner that meets IFRS, US GAAP, and local standards.
Why Choose Synpact for Fresh‑Start Valuation
- Restructuring Domain Expertise: Experience with bankruptcy, insolvency, and turnaround scenarios.
- Accounting & Regulatory Compliance: Valuations consistent with fresh‑start accounting under US GAAP (ASC 852) or IFRS remeasurement rules.
- Transparent & Auditable Methods: Detailed documentation of assumptions, market inputs, and valuation rationale.
- Timely Delivery: Ability to meet tight emergence or court‑mandated deadlines.
- Independence & Credibility: Objective valuations acceptable to creditors, courts, and regulators.
- Cross‑Functional Capabilities: Integration of finance, tax, legal, and valuation disciplines.
Our Bankruptcy & Fresh‑Start Valuation Services
Entity Reorganization Valuation
Remeasurement of all assets and liabilities to fair value at emergence date.
Identification and valuation of new liabilities, residual equity, and restructured capital.
Asset & Liability Valuation
Fair value of tangible assets (property, equipment, inventory) and intangible assets (IP, customer relationships).
Valuation of liabilities, including contingent and uncertain obligations, warranties, litigation claims.
Distressed / Special Situation Adjustments
Valuations that reflect distress, control premiums or discounts, marketability, or liquidity constraints.
Scenario modeling for recovery probabilities and defaults.
Fresh‑Start Compliance Reporting
Preparation of valuation disclosures, reconciliation to debt restructuring terms, and emerging equity valuation. Support for auditors, financial statement disclosures, and creditor review.
Stress Testing & Sensitivity Analysis
Sensitivity analysis to key inputs — discount rates, recovery rates, growth assumptions.
Scenario modeling under best / base / worst cases for reorganized entity.
Process & Workflow
- Engagement Kick‑off – Understand bankruptcy status, reorganization plan, timing, and legal constraints.
- Data Collection & Review – Collect financials, debt schedules, asset registries, claims, legal obligations, market data.
- Model Framework Design – Develop valuation models for assets, liabilities, restructuring adjustments, and equity.
- Remeasurement & Valuation – Compute fair values of all components, adjustments, and reconciliations to restructuring terms.
- Report & Audit Support – Deliver full valuation report, workpapers, sensitivity analyses, and auditor / creditor support documentation.
Industries & Use Cases
Industries / Sectors Covered:
- Manufacturing & Industrials
- Retail & Consumer
- Real Estate & Infrastructure
- Energy & Utilities
- Technology / Software
- Healthcare / Life Sciences
Use Cases:
- Corporate bankruptcy emergence and reorganization
- Fresh‑start accounting under GAAP / IFRS
- Creditor proof valuations and fairness assessments
- Distressed debt restructuring / distressed M&A
- Turnaround planning and recapitalization
Frequently Asked Questions (FAQs)
Q: What is “fresh‑start valuation” in bankruptcy accounting?
A: It’s the revaluation of all assets and liabilities to fair value at the date the reorganized entity emerges from bankruptcy, resetting its basis.
Q: Under which accounting standards is this required?
A: Under US GAAP, ASC 852 governs fresh‑start accounting. Under IFRS, similar remeasurement and fair value rules apply in restructuring contexts.
Q: How is distressed / special situation value handled?
A: We incorporate discounts or premiums reflecting market distress, liquidity constraints, and probability of default or recovery.
Q: How long does this valuation typically take?
A: Depending on complexity and data availability, engagements usually take 10–20 business days, or faster if required.
Q: What deliverables are provided?
A: Full valuation report, models, supporting workpapers, sensitivity scenarios, and audit / creditor review documentation.
Call to Action
Emerging from bankruptcy or planning a reorganization and needing a compliant fresh‑start valuation? Synpact Consulting is equipped to deliver precise, credible valuations that align with restructuring plans, accounting rules, and creditor expectations.
Contact: info@synpactconsulting.com to request a consultation or sample valuation.