At the AICPA’s 2017 FVS Conference in Las Vegas, we saw fledgling “NextGen” valuation practitioners rubbing shoulders with veteran thought leaders in the profession. With eight tracks offering over 80 breakout sessions, there was valuable information for experts of every level. Last week’s BVWire included some takeaways and practical tips we gleaned from the event—here are some more:

• Are you billing for trial practice time with your attorneys? You should, says a panel on expert witness testimony in family law. The practice is part of analyzing and improving your testimony and report, point out Clay Price (Clay Price & Associates), Shannon Farr (Pershing Yoakley & Associates), and attorney Randy Kessler (KS Family Law).

• Price also suggested a good way to get associates’ feet wet for court: Bring them to your next trial to show them what it’s like—and how easy it is to make a mistake.

• Big changes are coming in new guidelines for fair value in the form of two new practice aids now in development at the AICPA—one on business combinations and the other on private equity and venture capital. The latter guide is expected to be released in draft form in May 2018 and will have a significant impact on the alternative investment industry, say Mark Smith (AICPA) and David Larsen (Duff & Phelps), who are both on the task force developing the guide. It’s tipping the scales at over 650 pages and will contain case studies and examples of exercising valuation judgments.

• New guidance from The Appraisal Foundation on valuing contingent consideration essentially recommends the use of option pricing methodology for all earnouts based on financial (e.g., revenue, EBITDA) or nonfinancial metrics with systematic risk (e.g., units sold, new customers), say Travis Chamberlain (CliftonLarsonAllen) and Gary Raichart (Duff & Phelps).

• The reasonable compensation concept can be used for estimating earnings capacity in personal injury cases—but just in some states, say Howard Silverstone and James Stavros, who are both with Forensic Resolutions Inc.

• Authors of A Consensus View: Q&A Guide to Financial Valuation strongly urged the audience to put more scrutiny on management’s prospective financial information (PFI). Too many practitioners simply take the projections and plug them into a DCF without questioning them, say Jim Hitchner (Financial Valuation Advisors) and Jay Fishman (Financial Research Associates). The other panel member, Harold Martin (Keiter), agreed—he was filling in for the book’s third author Shannon Pratt (Shannon Pratt Valuations), who was unable to attend.

• PFI concerns were echoed by Mark Zyla, whose firm, Acuitas, just issued the “2017 Survey of Fair Value Audit Deficiencies,” which examines seven years of Public Company Accounting Oversight Board (PCAOB) inspection reports on auditing firms. According to its analysis, one of the root causes of most fair value measurement audit deficiencies is the failure to adequately test management PFI.

You’ll find more coverage of the conference starting in the January issue of Business Valuation Update.