Questions a judge will ask of a valuation expert witness

New resource for judges, lawyers and expert witnesses in valuation cases

Does the expert witness have a thorough understanding of the business and has he or she considered the eight factors of Revenue Ruling 59-60? Why does the expert believe his or her determination of the normalized income to capitalize best represents the expected future performance of the company? Under the DCF method, can revenues realistically grow at the projected rates and do the expenses support the revenues?

The Business Valuation Bench BookThese are just a few of the many questions a judge will ask about your opinion of value. You’ll find a lot more in a new book, The Business Valuation Bench Book, by William J. Morrison (WithumSmith+Brown) and Jay E. Fishman (Financial Research Associates), two well-known valuation specialists. The book is designed to give judges and attorneys a reference guide of fundamental business valuation concepts. For valuation experts, it will help you prepare for court and give you insights into how to review and critique the work of other experts.

Here's a Table of Contents for the book:

  Introduction

  Learning Objectives

  Chapter 1. Business Valuation Concepts

  Chapter 2. Approaches to Value

  Chapter 3. Income Approach

  • Income Capitalization Method
    • Normalized Earnings
    • Income to Capitalize
    • Capitalization Rate
    • Summary
  • Discounted Cash Flow Method

  Chapter 4. Asset-Based Approach

  • Net Asset Value Method

  Chapter 5. Hybrid Excess-Earnings Method

  Chapter 6. Market Approach

  Summary

  Appendices

  • Appendix 1. Charting Goodwill Jurisprudence
  • Appendix 2. Normalization Adjustment Comparison
  • Appendix 3. Income to Capitalize Comparison
  • Appendix 4. Cap Rate Comparison
  • Appendix 5. Discounted Cash Flow Comparison
  • Appendix 6. Net Assets Comparison
  • Appendix 7. Excess Earnings Comparison
  • Appendix 8. Transaction Multiples Comparison
  • Appendix 9. The Basics of Discounts
    • Discount for Lack of Control
    • Discount for Lack of Marketability
    • Other Discounts
  • Appendix 10. Glossary of Business Valuation Terms
  • Appendix 11. Business Valuation Bench Book Questions
  • Appendix 12. Business Valuation Bench Book Reference Guide