Again this year, BVR was pleased to sponsor the two-day Virginia Society of CPAs Forensic and Valuation Services Virtual Conference, which saw record attendance, reports Harold Martin (Keiter), who served as chair of the conference planning task force. Excellent speakers presented a lot of great information, and here are a few interesting bits of information we picked up:

• Pre-COVID-19 valuations may not be useful, so consider using a “hypothetical situation” to do two valuations as of the same date (one with impacts of COVID-19 and one without)—this complies with SSVS and USPAP;
• Several speakers remarked that business at their practices dipped during 2020, but it’s rebounded in 2021—and then some (“we’re slammed,” “our best year in decades,” “a lot of estate and gift work”);
• A case to watch: A court in Arizona KO’d the use of a calculation report, but the appellate court ruled it was wrong to do that and sent the case back to the lower court (the case, Larchick v. Pollock, is in BVLaw);
• Developing the proper statistical model for lost profits analysis hinges on understanding the drivers of—and trends in—firm performance;
• Tax proposals in Washington seek to eliminate valuation discounts for family limited partnerships and personal holding companies, but it’s a narrower provision than the 2017 proposed Sec. 2704 regs that targeted estate valuation discounts for minority interests;
• When doing forensics, you need a definite methodology (e.g., the IRS uses financial status audit techniques (FSAT));
• The biggest problem with determining reasonable compensation is dealing with owners with two hats—as an owner and also as an employee/executive—where there is a commingling of compensation and profit; and
• An FBI agent spoke on cybersecurity and noted that each of the 56 FBI field offices have a least one cyber squad investigating ransomware and other cyber crimes.

Much more coverage of the conference will be in the November issue of Business Valuation Update.