BVWire attended the AICPA’s 2017 FVS Conference in Las Vegas where over 1,000 business valuation and forensics experts mingled and attended a vast array of breakout sessions, workshops, and networking events.
AICPA doings: In terms of AICPA developments in this area, a major accomplishment was the launch earlier this year of the new credential for fair value for financial reporting for U.S. publicly traded companies, Certified in Entity and Intangible Valuations (CEIV). The AICPA, ASA, and RICS have spearheaded this effort, and the credential is now being issued. The AICPA also announced it is developing a second new credential on its own, Certified in Valuation of Financial Instruments (CVFI). Public comments are being reviewed on an exposure draft of a “disclosure framework” similar to the CEIV’s Mandatory Performance Framework (MPF).
There will be a big impact on the valuation process for alternative investment funds with the coming of the AICPA’s Private Equity & Venture Capital Accounting and Valuation Guide. A draft is expected to be released in April 2018 or May 2018. The guide is expected to be over 650 pages and contain examples of exercising valuation judgments, providing more in-depth industrywide guidance leading to greater global consistency.
Practical tips: There were many breakout sessions to choose from with excellent presenters. Here are some takeaways from just a few of the sessions we attended:
- University libraries are a good source of local economic data, noted Gary and Linda Trugman (Trugman Valuation Associates) during their preconference workshop on valuation report writing.
- Do not use healthcare compensation surveys as a basis for a FMV opinion—they’re fine for benchmarking only, advises Mark O. Dietrich (Mark O. Dietrich, CPA, PC), who has done groundbreaking research in this area.
- To market your practice to attorneys, attend events they do where you’ll feel uncomfortable being there—that means your competitors probably won’t be there, says attorney Randy Kessler (KS Family Law).
- In the context of damages, unjust enrichment—a very misunderstood remedy—means disgorging “gains” not “profits,” a key distinction, points out Nancy Fannon (Marcum).
- For older restricted stock studies used for DLOM, the underlying data are no longer available, observes Jim Hitchner (Valuation Products and Services).
- If you need a third-party expert, never do the hiring yourself—let the attorney or client do it, advised a panel on ethical dilemmas. It’s fine to give recommendations, though, say panel members Michelle Gallagher (Gallagher Valuation & Forensics PLC), Robert Gray (Baker Tilly), and Elizabeth Woodward (Dean Dorton).
- An earnout based on future services may not be deemed “contingent consideration” under forthcoming guidance from The Appraisal Foundation, say Travis Chamberlain (CliftonLarsonAllen) and Gary Raichart (Duff & Phelps). Chamberlain is on the team working on the new guidance.
You’ll find complete coverage of the conference starting in the January issue of Business Valuation Update.
Kudos to the conference planning committee on the valuation side: conference chair Stacey Udell (HBK Valuation Group) and committee members Marc Bello (Edelstein & Co.), Randie Dial (CliftonLarsonAllen), Nathan DiNatale (SC&H Group), Shannon Farr (Pershing Yoakley), Laurin Quiat (BakerHostetler), and Peter Weinstein (KSV Valuations, Toronto).
Next year’s FVS conference will be in Atlanta (dates not announced yet), so we hope to see you there!
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