Do you apply a DLOM to a controlling interest? Even the top BV thought leaders disagree on this one. Shannon Pratt does it—he takes marketability discounts on controlling interests, including 100% ownership. You can’t convert a company into cash in a couple of days, so the DLOM is OK, he says. (That sounds like a discount for lack of liquidity to us, but that’s another story.) At the ASA’s 2017 Advanced BV Conference in Houston (October 7-10), we will definitely be attending this session: Evidence of DLOMs for Controlling Interests, which Ronald DiMattia will present.
If you check out the full agenda for the conference, you’ll notice something: This year’s sessions will stress the practical application of valuation theories. For example, there’s a session on how to forecast balance sheets and cash flow statements for DCF analyses (Joseph Emanuele). There’s also practical ways of using regression analyses in an appraisal (Mark Shirley). FLPs are on the radar of regulators, so there’s a session on using new REIT data to value these entities (Spencer Jeffries and Jim Park). And there’s a lot more.
BVWire will be there—stop by and say hello at the BVR booth!
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