New thoughts on adjusting control level cash flows

"I've always been concerned about the control studies," said Gary Trugman, speaking at the AICPA FVS Conference. Because of these concerns, he understands the need in some circumstances to adjust cash flows to reflect minority risks. "But then there are courts like most of the Delaware Chancery which are accustomed to seeing a control premium adjustment to marketable minority values." So Trugman reminded appraisers to first consider the venue prior to determining whether to apply a control premia. "Normalization adjustments to the cash flows may take care of control benefits."