Many valuation experts rarely (or never) use the asset approach for an operating business. But this approach may be more applicable than you might think.

New case: The Supreme Court in Nebraska has found that the proper premise of value for an operating business was going concern and the proper methodology was the asset approach. The business sells and services farm equipment. The court noted that the expert referred to a “well known valuation expert” who states that the asset-based approach can be used with the going-concern premise of value. (Coincidentally, a 2020 article in Business Valuation Update refers to a well-known valuation expert discussing this very topic.)

There are more valuation issues in the case, including the definition of fair value and the treatment of built-in gains taxes. The case is Bohac v. Benes Serv. Co., 310 Neb. 722; 2022 Neb. LEXIS 5. A case analysis and full opinion are available on the BVLaw platform.