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2021 DLOM Study Is Out Now

The 2021 Discount for Lack of Marketability Study provides objective rate of return measures to implement the Johnson/Park empirical method for determining a discount for lack of marketability (DLOM) for the valuation of interests in privately held corporations and partnerships. This report instantly provides you with the most current DLOM rate of return information including a thorough explanation and example on how to apply these data. Read more >>

Introducing BVR's Benchmarking Intangibles Guide

Valuing intangible business assets can be overwhelming at times. Between the different approaches and the myriad factors that go into each, it’s easy to miss a step. BVR’s recently released third edition of Benchmarking Identifiable Intangibles and Their Useful Lives in Business Combinations seeks to provide context to this dizzying array of factors with a look at the different approaches for valuing intangible assets—as well as empirical data from actual valuations. Read more >>

Meet Jim Alerding BVR's New Legal Editor

Hi, I am Jim Alerding, CPA/ABV. Many of you know me from my presentations and articles over the years. I have over 40 years of experience in business valuation and litigation services. I started in 1980 in the BV and testimony arenas. Since my first case was a valuation for a divorce case in which I then testified, I started in BV and Litigation Support at the same time. Read more >>

BVR’s Discount for Lack of Marketability Survey: Results Show Some Red Flags to Watch For

BVR’s recent survey on methodology and practice for estimating a discount for lack of marketability (DLOM) garnered over 200 responses. After analyzing the results, we identified several red flags that were worthy of further exploration. Read on to learn more! Read more >>

Get a Sneak Peek at Trends, Valuation Multiples, and Operation Ratios for Small, Main Street Private Companies

BIZCOMPS, a comprehensive online database with financial details on small, Main Street private companies, has been recently updated with new transactions, and the current BIZCOMPS/BVR Deal Review (BDR), exclusively for subscribers, is now available. This special publication analyzes general trends, valuation multiples, and operating ratios for transactions in the database. Get a sneak peek at the Summer 2021 issue with highlights including harmonic mean and median sale price, median SDE/rent, and more. Read more >>

The Story Behind Your Valuation: Damodaran’s Five-Step Framework

One of the lessons learned from the COVID-19 crisis is that a coherent narrative is more important than ever in business valuation, says Dr. Aswath Damodaran, of New York University Stern School of Business, who gave the keynote address at the CBV Congress 2021. A valuation needs a marriage of narrative and numbers, Damodaran says. In a good valuation, the numbers are “bound together” by a coherent narrative, and storytelling is kept grounded with numbers. Too much emphasis on numbers can make valuations mere “plug-and-point exercises” that may be perceived to be sales pitches or a confirmation of preconceived values. Read more >>

Five Areas to Explore If You Suspect a Spouse Is Hiding Crypto Assets in a Marital Dispute

In BVR’s recent webinar, Cryptocurrency Fraud and Forensics: What Valuation Professionals Need to Know, forensic and cryptocurrency experts Katerina Gaebel and Mark DiMichael, both of Citrin Cooperman, covered various hot topics on fraud and forensic accounting issues in digital assets and how they affect the business valuation profession. Here, we summarize five key areas where one would find proof of crypto asset fraud in a marital dispute, including interviews, tax returns, bank accounts, credit card statements, and more. Read more >>

Wholesale Trade: Sales and Inventories

In the May issue of the Economic Outlook Update (EOU), the publication added data highlighting the wholesale trade segment of the U.S. economy, putting a spotlight on the data the U.S. Census published. The report highlights the sales totals of merchant wholesalers for April 2021, which included adjustments for seasonal variations and trading day differences. The report showed an improvement in wholesale trade in April 2021 when compared to March 2021 and from one year ago. In April, total sales were $570.8 billion, or 0.8% higher than the revised March level and 43.6% higher than the level from one year ago. Read more >>

In Jackson case, Tax Court dismisses IRS expert’s revenue projections as ‘simply not reasonable’

When Michael Jackson died, his image and likeness was besmirched and yet, once competent executors took charge, they were able to make a lot of money for the estate in the immediate post-death years. The issue was to what extent this subsequent development could factor into the image-and-likeness valuation. In explaining his high valuation, the IRS’ expert offered a theory of “foreseeable opportunities” that the U.S. Tax Court found unpersuasive. Read more >>

A Practical, Step-by-Step Process for Applying Invested Capital Premiums

For years, the valuation profession has debated the definition of a control premium, including its distinction from an acquisition premium. What began years ago as a relatively simple question—if there is a control premium, what should it be?—now includes analyzing such concepts as invested capital premiums and equity-based premiums, transaction synergies and strategic values, marketability, and levels of control. All are “key points” to keep in mind throughout the quantification of a control premium, say Tim Meinhart and Nate Novak (both of Willamette Management Associates), who led a webinar on this topic titled Evaluating and Applying Control Premiums earlier this year. Read more >>

Caesars Entertainment sues over COVID-19-related economic damages

On March 19, Caesars Entertainment joined the long list of businesses that have filed lawsuits against their insurance companies for refusing to pay business interruption losses stemming from COVID-19-related government shutdowns of economies across the nation and world. Whether Caesars, which asserts that losses its various business entities incurred may exceed $2 billion, succeeds where a lot of other plaintiffs have failed will be worth monitoring. Read more >>

Five Timely Insights From the NYSSCPA Business Valuation and Litigation Services Conference

The conference season is well underway, and Business Valuation Update has been on the virtual road, collecting the latest insights on a wide variety of topics. Here are some interesting takeaways from the New York State Society of CPAs (NYSSCPA) Business Valuation and Litigation Services Conference, held May 17. Topics included emerging issues (SPACs, cryptocurrency, Zoom as a practice-builder) and some new perspectives on evergreen topics (estate valuations, cannabis, distressed firms, and collaborations). Read more >>

Business Valuation’s ‘Dirty Little Secret’

Recent developments have put the spotlight squarely on projected financial information (PFI). The perception is that too many valuation experts simply accept projections and forecasts they’re given without applying enough scrutiny—or any scrutiny at all. Fortunately, there is some new guidance on how to examine and substantiate PFI you get from management or other third parties in BVR’s new Guide to Management Projections and Business Valuation: Analysis and Case Law. The following is an excerpt from that chapter. Read more >>

Tax Court resists tax affecting in Michael Jackson case

Although the U.S. Tax Court recently handed the Michael Jackson estate a decisive victory regarding the estate’s tax liability, the court did not side with the estate on tax affecting, an issue that has preoccupied valuators, many of whom are proponents of the practice, for a long time. Read more >>

How Did the Pandemic Impact EBITDA Multiples in 2020? Explore a 12-Month Snapshot in the DealStats Value Index

With the COVID-19 pandemic putting a stranglehold on the U.S. economy for most of 2020 and causing an unprecedented economic impact on small businesses, DealStats Value Index (DVI) captured the 12-month snapshot on how earnings before interest, taxes, depreciation, and amortization (EBITDA) multiples have trended. Read more >>

Tax Court issues highly anticipated ruling in Michael Jackson case

In the long-running litigation between the estate of the late megastar Michael Jackson and the Internal Revenue Service, the U.S. Tax Court recently issued its opinion on the value of Jackson’s image and likeness, as well as the value of his interest in two music publishing assets. Overall, this much-anticipated decision is a major win for the Jackson estate. The court’s momentous decision includes an expansive analysis of the rivaling valuation testimony. Read more >>

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