Business Valuation Update

In the July 2021 issue:
  • Valuers and Attorneys Advise How to Stay Out of Daubert Trouble
  • Ghaidarov Offers a New Framework for DLOM
  • Timely Insights From the NYSSCPA Business Valuation and Litigation Services Conference
  • New World of Energy Valuations, Per Speakers at the ASA Houston Conference
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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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New World of Energy Valuations, Per Speakers at the ASA Houston Conference

How have valuations been upended in this sector? What’s the outlook for all of the regulatory and tax proposals? When will this sector rebound? The answers may surprise you.

Ghaidarov Offers a New Framework for DLOM

Ghaidarov, who has published papers related to option price models for estimating a discount for lack of marketability (DLOM), presents a new concept for illiquidity discounts.

‘Absurd’ CAPM, Size Impact, ‘Sense Checks,’ and Family Firms Highlight the ICAEW Conference

Excellent speakers and interesting topics were on hand at the valuation conference of the Institute of Chartered Accountants in England and Wales (ICAEW) in the United Kingdom.

Alerding Gives an Update on BV Standards and Guidance

What have you missed in terms of new and updated standards and guidance? Find out from veteran valuation expert Jim Alerding (Alerding Consulting), who has been involved in the development of some of the key standards.

BV News and Trends July 2021

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

Global BV News and Trends July 2021

Business valuation news from a global perspective.

Valuers and Attorneys Advise How to Stay Out of Daubert Trouble

Several sessions at the inaugural BVR National Economic Damages Virtual Conference discussed how valuation experts can avoid the nightmare of having their testimony excluded in court. Of course, much of that applies to any type of case, not just damages.

Timely Insights From the NYSSCPA Business Valuation and Litigation Services Conference

Topics include emerging issues (SPACs, cryptocurrency, and Zoom as a practice-builder) and some new perspectives on evergreen topics (estate valuations, cannabis, distressed firms, and collaborations).

Updated Data in Largest Pre-IPO Study Reveal High Discounts

New pre-IPO data for the first quarter of 2021 has been added to the Valuation Advisors Lack of Marketability Discount Study, which is the largest study of its kind. The use of pre-IPO data is a widely used and accepted method for estimating a discount for lack of marketability (DLOM).

COVID-19 Just a Speed Bump in Hot M&A Market, Say Speakers at Transaction Advisors Forum

Coverage and key takeaways on valuation from the April 30 M&A Strategy Forum that included sessions conducted by corporate development leaders, in-house M&A counsel, board members, and private equity investors.

Eliminating Outliers in Financial Data Without Cherry-Picking

The author discusses one method for determining outliers that is defensible from the allegation of cherry-picking—that is, bias in selecting data to either suit the client’s wishes or to generate a specific result for the client.

BV News and Trends June 2021

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

How to Use New Data on Invested Capital Premiums

To estimate acquisition premiums the use of invested capital premiums is highly encouraged in certain situations. This article presents a case study and step-by-step guide to using these data that are now included in the Factset Mergerstat/BVR Control Premium Study.

Economic Damages From Design Patent Infringements

The authors discuss the challenges of determining lost profits for design patent infringement. This is an excerpt from The Comprehensive Guide to Economic Damages, 6th edition.

Defining Terms: Forecasts v. Projections—Why Does It Matter?

One area that can trigger some confusion is the difference between the terms “forecast” and “projection.” Some people use them interchangeably, but these are formal terms found in the literature, so they should be used appropriately.

Global BV News and Trends June 2021

Business valuation news from a global perspective.

New Study Analyzes Earnout Data in DealStats

What the BVR DealStats database reveals about the nature of earnouts, keeping in mind the fact that the pandemic has affected some industries far greater than a “normal” recession.

Company-Specific Risk Is Not All That Specific

All firms face company-specific risks, many of which are somewhat similar across industries and companies. So is anything really company-specific? An alternative method eliminates the need to totally guess at the company-specific risk premium.

The Strategic Premium: An Inside Look at M&A Prices

Synergistic/strategic value should not be combined into one level in the typical chart that shows levels of value. Some buyers pay a “strategic premium” that propels strategic value to the top of the value chart and well in excess of the expected synergistic value. The author uses real-world examples to illustrate this concept.

Fair Price for Delaware Fiduciary Actions Can Exceed Appraisal Fair Value

Can fiduciaries of Delaware corporations breach their duties and face damages for a merger that provides stockholders with the equivalent of fair value in a judicial appraisal? The answer may surprise you.

Letter to the Editor: The Use of the Arithmetic Mean to Average Multiples

The author takes issue with an article that concludes that the harmonic mean should be used as the appropriate measure of central tendency for a sample of market multiples.

Personal v. Enterprise Goodwill in Florida Divorce Cases: What the Appellate Courts Say

In the wake of the recent King case, this is an analysis of marital dissolution case law from the Florida Supreme Court and the five District Courts of Appeal (DCA) of Florida that relates to the valuation of personal and enterprise goodwill in that state.

BV News and Trends May 2021

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

Global BV News and Trends May 2021

Business valuation news from a global perspective.

Tax Court Hands Jackson Estate Major Win but Finds Reasoning for Tax Affecting Unpersuasive

Tax Court mostly sides with estate of late superstar in valuing three contested assets; assets had to be valued separately, based on parties’ stipulations, and at death; court says Jackson’s “tattered” image and likeness meant he earned little money apart from his music; court rejects tax affecting.

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