Getting a Fresh Start After Chapter 11

Market conditions have forced a number of companies to file for reorganization under Chapter 11. While fresh start accounting may allow companies to emerge from bankruptcy with a clean balance sheet, there are many complexities with this process, in light of evolving accounting standards.

Fresh start accounting was previously covered under the American Institute of Certified Public Accountants Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code.” Under Financial Accounting Standards Board Accounting Standards Codification^TM 852 (FASB ASC 852), "Reorganizations," certain emerging entities will adopt fresh start accounting, which calls for them to apply fair value concepts in determining their reorganization value and establishing a new basis for financial reporting.

Crowe Horwath LLP provides the broad expertise to help companies navigate through the complex process. Our highly experienced fresh start services team – led by a single point of partner-level contact – provides a full range of support:

Valuation. Tangible and intangible assets require fair value assessment, and Crowe assists management in identifying the adjustments that are necessary to convert assets and liabilities from historic balances to current fair values.

Accounting and Consulting Services. Crowe’s detailed knowledge of fair value measurements and preferred accounting policies help businesses achieve a fresh start balance sheet.

Tax Services. Crowe guides companies to account appropriately for net operating losses, valuation allowances, reorganization value, and other aspects of income tax accounting and regulatory requirements under FASB ASC 740, "Income Taxes."

Bankruptcy and Insolvency Services. Crowe has comprehensive expertise to assist parties in a wide range of matters including interim management, reorganization plans, recovery alternatives, exit strategies, and more.

For more information on how Crowe can help, please contact Mary Ann Travers at 630.575.4378 or maryann.travers@crowehorwath.com.