Key insights from the VSCPA BVFLS conference

BVWireIssue #216-4
September 30, 2020

valuation profession news
expert witness, business valuation profession, cost of capital, valuation practice management

BVWire attended this year’s two-day Business Valuation, Fraud & Litigation Services (BVFLS) Virtual Conference sponsored by the Virginia Society of CPAs (VSCPA), now in its 21st year. Conference chair Harold Martin (Keiter) greeted the online audience with a quote from the Grateful Dead that it’s been a “long, strange trip” with what’s been going on this year. Here are a few insights we gleaned from this excellent conference:

  • If you are comfortable wearing a target on your back, use a calculation report in court—opposing counsel will take dead aim with a barrage of challenging questions;
  • Guideline transactions during COVID-19 need special scrutiny—the target firm may be particularly strong or there are some powerful synergies in the deal;
  • Make sure your estimate of the cost of equity is higher than before the pandemic—a by-the-book estimate will give you a lower figure due to today’s low interest rates;
  • It’s now is the “golden age” of estate planning, as there almost certainly will be a new tax law after the election—this could be the first time ever that the estate tax exemption goes down;
  • When doing a review of a valuation report, never attack the appraiser—attack the report;
  • Most attorneys are clueless about business valuation—it’s the expert’s job to educate them;
  • Consider using a Kovel arrangement with attorneys when acting as a consulting expert—properly executed, it puts the valuer’s work and communications in the zone of attorney-client privilege;
  • There’s not much an attorney can do if his or her expert witness is struggling on the stand—one idea is to call for a break so the witness can regroup; and
  • Think about creating a suite of “minimum viable services”—just unbundle all of the tasks you do in a full-blown valuation and market them separately, such as cash-flow forecasting, industry analysis, quality of earnings, and the like.

Full coverage of the conference will be in the November edition of Business Valuation Update.

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