Do the “Big Four” accounting firms accept tax-affecting when using the cost approach?  That question was lobbied at panelists during the recent “Current Topics in Business Valuation” conference at the New York City ASA.  Consider the responses:

• Peter Wollmeringer (KPMG) said his firm wants all values to be after tax. 
• Arthur Miller (Ernst & Young) and Stamos Nicholas (Deloitte) both said their firms would not accept tax-affecting. 
• Matthew Pinson (PricewaterhouseCoopers) took the middle ground:  “We prefer tax-affecting, but given the controversy, we’ll accept either method” with a well-supported argument.

The wide range of responses reminds appraisers how important it is to discuss all aspects of a valuation for financial reporting with the auditor—not only the methods but the meaning of terms and the supporting analysis.