Yes, according to Mark Zyla (Acuitas), who also spoke at last week’s ASA BV conference in Chicago. As a result, Zyla is seeing more appraisals give the market approach less weight than in the past.  In part, this is because “comparables come and go as M&A activity increases [and decreases],” he told ASA attendees.  But the downturn has also created “noise” between market prices and management expectations, Zyla pointed out. “All of your comparables can be ‘distressed’ by market activities, while management still believes equally as strongly in their forecasts.”  

“You’re going to see more challenges on your comps from the courts, regulators, and leaders in our profession,” he added. To compensate for the lack of good comps, some appraisers are trying to replace ratios derived from recent transactions with the use of longer term multiples—although this could introduce yet another set of assumptions that analysts will need to defend to auditors, attorneys, and other users.