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.
Please let us know
if you have any comments about this article or enhancements you would like to see.