Determining FMV in light of Stark II important for medical practice valuations

BVWireIssue #97-2
October 13, 2010

“When valuing a medical practice, how do you determine fair market value in light of recent Stark II regulations?” asks Reed Tinsley CPA, CVA, CFP in a recent NACVA Ambassador QuickREAD article. “Some of it depends on the definition of the term “commercially reasonable.” And a lot also depends on accurate assessment of future revenues, as well as expense assumptions,” he answers. Tinsley reports:

  • “The Stark definition of fair market value may restrict and prevent the use of certain market comps, since use of such comps may not be "commercially reasonable."
  • Just because a transaction may be "fair market value" does not necessarily make it "commercially reasonable."

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