Use of Forensic Evidence in a Lost Profits Case

BVResearch Pro
Training Event Transcripts
July 20, 2023
Michael G. Kaplan, MBA, CPA, CVA, CFFA
economic damages & lost profits
damages, lost profits, admissibility, calculation of value, forensic accounting, yardstick analysis, reasonable certainty


Financial forensics experts are often called upon to measure the lost profits a business suffered as a result of the actions of another party. The measurement typically compares the profits of the company had the defendant not acted inappropriately to the profits that the company actually realized. Because lost profits measurement involves the calculation of the value of something that should have happened but did not, the process must incorporate assumptions and significant reliance upon internal and external data to measure (estimate) what the profits would have been had the defendant not harmed the plaintiff. For the damages expert to offer credible opinions, it is critical that the input variables and the assumptions be based upon credible underlying evidence. Absent this forensic evidence, the expert’s opinions may be deemed to be not much more than hypothetical. In this session, we will explore the types of forensic evidence that are customarily available and how it is effectively incorporated into a credible lost profits calculation.