It’s fine to cite authoritative texts in your report—but court cases are
another story, advises Jim Hitchner (Financial Valuation
Advisors). He spoke at last week’s Forensic and Valuation Services
Conference hosted by the New Jersey Society of Certified Public Accountants
Hitchner pointed to the three main texts in the BV profession:
Valuing a Business
(by the late Shannon Pratt), Gary Trugman’s
Understanding Business Valuation,
and his own
Financial Valuation Applications and Models. He has cited all of these resources in his reports when appropriate,
pointing out that the Pratt book has just come out with its new sixth
edition (done by a group of contributors). The Trugman book is “very
different in style and tone” and is “full of good stuff,” he noted.
Hitchner also said he is working on the fifth edition of his book, which is
scheduled to come out in the first quarter of 2023. All of these books are
available from BVR.
As for court cases, they should not be cited, he advised, but there are
exceptions. If the attorney advises that the jurisdiction has an important
case that is used as precedent for a certain valuation approach or
methodology, citing that case may be appropriate. And, of course, the Mandelbaum case is fine to cite in your DLOM section.
The NJCPA conference, hosted by Roy Kvalo, director of
litigation and valuation services at The Churchin Group (Red Bank, N.J.),
was excellent, and we’ll have more coverage in future weeks.
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