Business Valuation Update

In the June 2018 issue:
  • The Use of Financial Projections in Solvency Opinions
  • Using Jensen's Alpha to Separate Active and Passive Appreciation
  • Checklist for Initial Information Request to Analyze Replacement Compensation
  • BV Firm Marketing Experts Reveal Practice-Building Insights
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Welcome to Business Valuation Update
The Business Valuation Update (BVU) has been the voice of the valuation profession since its inception in 1995. Each monthly issue includes new thinking from leading professionals, detailed reports from valuation conferences, analysis of new business valuation approaches, coverage of “landmark” legal cases in key business valuation issues, regulatory and standards updates, and much more!  Learn more and subscribe >>
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‘Breaking Bad’ in the Business Valuation Profession

The increasing use of calculation engagements seriously compromises the valuation profession’s historical standards of reliability and independence.

How New QBI Deduction Impacts the Hypothetical Buyer and Seller, Part 2

Part 2 of a two-part article on the impact of the new tax law’s Qualified Business Income (QBI) deduction for pass-through entities in determining estimated after-tax cash flow at the investor level, as well as the related change in the fair market value of the entity.

Growing Status of Fair Value Sparks Record Attendance at ASA FV Conference

The growing importance of fair value for financial reporting and the ongoing efforts to improve the quality in this area of practice triggered a sell-out for the ASA/USC 13th Annual Fair Value Conference held May 10 in Los Angeles. Here’s a recap.

Tips and Takeaways From the NYSSCPA BV Conference

BVU attended the annual business valuation conference of the New York State Society of CPAs (NYSSCPA) on May 21 in New York City. As usual, it was an excellent conference, and here are a few takeaways from the sessions.

Letter to the Editor: Comments on an Article on the Use of Statistics in the Transaction Method

A valuation expert weighs in on dueling experts’ opinions on the use of statistics, including how many transactions should be used in the application of the transaction method of appraisal.

Work File Checklist for Attrition Rates for Customer Intangibles

Documentation requirements for fair value for financial reporting. This is based on the Mandatory Performance Framework (MPF) for the Certified in Entity and Intangibles (CEIV) credential.

Draft Regulations Take Center Stage at the BV Summit in Mumbai

A recap of the Business Valuation Summit—Mumbai where the focus was a discussion of the draft regulations for the Registered Valuer program.

BVU News and Trends July 2018

A monthly roundup of key developments of interest to business valuation experts.

Global BVU News and Trends July 2018

Business valuation news from a global perspective.

Global BVU News and Trends June 2018

Business valuation news from a global perspective.

BVU News and Trends June 2018

A monthly roundup of key developments of interest to business valuation experts.

BV Firm Marketing Experts Reveal Practice-Building Insights

Debra Sweeney and Mellanie Bartlett, co-owners of Sweeney & Bartlett Marketing Partners Inc., are interviewed. They work with a number of business valuation firms to help them build their corporate and individual brands.

Checklist for Initial Information Request to Analyze Replacement Compensation

The Tax Cuts and Jobs Act (TCJA) will trigger much greater scrutiny on what constitutes reasonable compensation for owner-employees of pass-through entities (PTEs).

Using Jensen’s Alpha to Separate Active and Passive Appreciation

The author presents an alternate approach (Jensen’s alpha) to segregating passive from active increases in the value of a marital asset. An example is presented of an automobile dealer.

Book Review: The BVR/AHLA Guide to Valuing Physician Compensation and Healthcare Service Arrangements, 2nd Edition

The second edition of this book expands upon the groundbreaking first edition and provides 1,400 pages of content written by 42 experts in the field, including attorneys and valuation experts.

Work File Checklist for Life for the Projection Period of Customer Intangibles

Documentation requirements for fair value for financial reporting. This is based on the Mandatory Performance Framework (MPF) for the Certified in Entity and Intangibles (CEIV) credential.

The Use of Financial Projections in Solvency Opinions

Financial projections are often a key input to the financial models used to assess solvency, but projections prepared by management or its professional advisors are sometimes overly optimistic. Here’s how to identify whether projections are reasonable and to assess the level of risk.

Earnouts and the Monte Carlo Method: Practice Tips for Implementation

Practice tips to use when implementing a Monte Carlo method (MCM) analysis to value earnout rights or obligations, plus a brief overview of earnout provisions and the MCM.

This Short Paragraph Can Bolster the DLOM Section in Your Next Report

Are you using a simple “benchmark average approach” for your analysis of a discount for lack of marketability (DLOM)? That type of analysis may have passed muster years ago, but times have changed.

Letter to the Editor: Response to Article on Separating Active and Passive Appreciation in the Value of a Marital Asset

The author says there are flaws in Dr. Ashok Abbott’s approach to segregating passive from active increases in the value of a marital asset—and he presents an alternate approach.

Letter to the Editor: Comments on an Article on the Use of Statistics in the Transaction Method

A renowned valuation expert weighs in on dueling experts’ opinions on how many transactions should be used in the application of the transaction method of appraisal.

New Tax Legislation Consequences on U.S. Transfer Pricing and Intangibles

The Tax Cuts and Jobs Act of 2017 (the Act) brought sweeping changes to the international tax landscape, including the transfer pricing arena. Intangible property is at the core of many of these changes. Plus, the IRS is cracking down on this area.

Work File Checklist for Operating Rights

Documentation requirements for determining the fair value of certain intangible assets deemed to be operating rights, such as government licenses and commercial franchises. This is based on the Mandatory Performance Framework (MPF) for the Certified in Entity and Intangibles (CEIV) credential.

BVU News and Trends May 2018

A monthly roundup of key developments of interest to business valuation experts.

Global BVU News and Trends May 2018

Business valuation news from a global perspective.

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