That's the recommendation of Garth Tebay--whether non-recurring events, or GAAP adjustments (like the LIFO reserve), type 1 control adjustment (discretionary income, officers' compensation, etc.), strategic adjustments. "Each one of these adjustment creates a different level of benefit stream, and therefore a different type of value," Tebay told NACVA this afternoon. Tebay cited Chris Mercer on "type II normalization adjustment," who argues, for minority positions, that the enterprise should be valued as a control level of value, including appropriate normalizations. Then, minority adjustments can be taken.
BVR is preparing a special report on best practices in normalization adjustments. Email Jan Davis, Executive Editor, for information.