Valuations for divorce: That was then, this is now

BVWireIssue #214-2
July 15, 2020

marital dissolution/divorce
divorce valuation, expert testimony, discounted cash flow (DCF), marital dissolution, marital estate

For those experts grappling with business valuations in a divorce context, practical tips and advice will be presented in what had been the AAML/BVR National Divorce Conference—but has been re-engineered as the AAML/BVR Virtual Divorce Conference. The agenda has been revamped to focus on the issues most impacted by COVID-19 that have upended valuations, particularly those for divorce. For example:

Then: At last year’s conference, the income, market, and asset approaches to valuation were all given their just due. Before the virus hit, the income and market approaches dominated, while the asset approach was rarely used for going concerns.

Now: The use of the market approach is down but certainly not out (you still must consider it under IRS Rev. Rul. 59-60). The asset approach may apply in more cases as many businesses may now be worth more dead than alive. But it’s the income approach that has gained much more prominence in the COVID-19 era. Within that approach, the single-period capitalized cash flow method has virtually disappeared in favor of the discounted cash flow—and with varying discrete periods and even different discount rates. Of course, projections are a lot more tricky than before. The conference has a session, Fact vs. Fiction: The Discounted Cash Flow Method in Family Law, to be presented by veteran valuation expert Ron Seigneur (Seigneur Gustafson LLP) and attorneys Darryl Feldman (Feldman Jackson) and Drew Soshnick (Faegre Baker Daniels LLP).

The conference begins September 9 with a multiday schedule designed to fully respect your workday obligations. To check out the full agenda, click here. See you there!

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