BVWire attended the ASA Advanced Business Valuation Conference in Houston, and we found the sessions to be an excellent mix of theory and practice—ideas that you can use in your practice right away. Here are just a few of the many takeaways:
- “Canned gets you canned,” says attorney David Aughtry (Chamberlain Hrdlicka), meaning the opposition will catch you if you lift material from other sources, especially other valuation reports.
- A company with excess cash should be worth more than one without an excess, all else being equal; one approach is to value the company using a required level of cash and then add in the excess, advises Trey Stevens (Stevens & Greer).
- In a general session, Carla Glass (Marcum) talked about “impact investing” where certain investors accept lower returns from firms that seek to generate a benefit for the public good (e.g., social or environmental impact) as well as a financial return. Of course, this impacts the cost of capital.
- Compensation expert Stephen Kirkland (Atlantic Executive Consulting) advises that you ask management about all related parties—both humans and nonhumans (entities)—and get the responses in writing.
- In an ESOP session conducted by Jeffrey Tarbell (Houlihan Lokey), an audience member says he uses clawback provisions to avoid legal exposure from an ESOP paying too much for company stock.
- In a valuation report, the economy/industry section should not be disproportionately larger than the company information section, advises Michael Paschall (Banister Financial).
- Bottom-up and top-down approaches to quantifying personal goodwill are gaining traction in marital dissolution cases, says Bob Morrison (Morrison Valuation & Forensic Services), who uses these approaches in Florida.
The December issue of Business Valuation Update will have more takeaways from the sessions.
Awards: During an awards luncheon, Tony Aaron was designated a Fellow (FASA). He is formerly with Ernst & Young and is now on the faculty at the USC Leventhal School of Accounting. Among other award recipients, Bill Johnston (Empire Valuation Consultants LLC) received the Jerry F. Larkin Award for outstanding volunteer service, particularly with the ASA’s Rising Stars efforts and the new CEIV credentialing program.
BVWire congratulates the conference planning committee for an excellent event: conference chair Bruce Johnson (Monroe, Park & Johnson Inc.), Rosanne Aumiller (Grant Thornton), Jaclyn Burket (SKY Valuation), Jay E. Fishman (Financial Research Associates), George Hawkins (Banister Financial Inc.), and Kevin Janke (Wipfli).
Extra: At the conference, Sharon Desfor, ASA’s international president, announced that the ASA membership approved the merger between the ASA and the National Association of Independent Fee Appraisers (real estate appraisers).