Business Valuation Update

In the February 2020 issue:
  • Pre-IPO Studies Endure to Retain Foothold in the DLOM Toolbox
  • Assessing Cybersecurity Risk When Doing a Business Valuation
  • Survey Reveals BV Firms' Billing Practices and Rates
  • Examining the Correlation Between IP and Startup Valuations
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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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Pre-IPO Studies Endure to Retain Foothold in the DLOM Toolbox

Pre-IPO studies have withstood criticisms and court challenges to remain a viable method for developing a discount for lack of marketability (DLOM). Over a third (38%) of valuation experts use them, according to a survey. The article includes an interview with Brian Pearson of Valuation Advisors, a provider of the largest pre-IPO study.

Assessing Cybersecurity Risk When Doing a Business Valuation

Don’t fall into the trap of thinking that just large firms face material risks related to data security and privacy concerns. Here’s a checklist for the guidance of valuation professionals to help assess these risks when performing a business valuation.

Survey Reveals BV Firms’ Billing Practices and Rates

How do your billing methods and rates stack up against other firms? Here are the results of BVR’s survey of over 160 business valuation, forensics, and litigation services (BVFLS) firms.

Examining the Correlation Between IP and Startup Valuations

Based on recent studies, this article discusses the role that intellectual property (IP) assets play in startup valuations and the IP strategy startups that recently went public implemented.

Rollover Equity: Don’t Just Take It at Face Value

The rights and preferences of rollover equity compared to the private equity sponsor’s shares and the sources of deal financing have important implications for valuation.

10 Special Risk Factors to Consider When Valuing a Dental Practice

Historically, dental practices have had a higher failure rate than the average business because of the special risks these entities face.

BVU News and Trends February 2020

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

Global BVU News and Trends February 2020

Regulators, Standard-Setters, VPOsIASB eyes plan to reintroduce goodwill amortizationAs the FASB is doing in the U.S., the International Accounting Standards Board is also exploring whether to reintroduce goodwill amortization. The IASB plans to release a Discussion Paper in early 2020 (February, we hear) for a 180-day comment period to weigh stakeholder interest in amending IFRS 3, Business Combinations, and IAS 36, Impairment of Assets.In conjunction with a recent meeting of the trustees ...

BVU News and Trends January 2020

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

Business Valuation Year in Review 2019

A look back at some of the developments in the BV profession in 2019, including important court rulings on tax affecting pass-through entities, a possible upending to the goodwill model, a new cost of capital platform gaining traction, and advances in fair value for financial reporting.

Valuers and Bankers: Benefits of Cross-Training Between the Professions

When underwriting loans bankers appraise business assets from a different angle than valuation experts. These differences should be identified and utilized as a learning tool to provide a deeper understanding of the data used for the benefit of both professions.

Valuers and Forensics Experts Converge at the 2019 AICPA FVS Conference

A mix of topics had something for everyone at this conference. Of note were some excellent sessions on expert testimony and there was a definite emphasis on fair value for financial reporting.

The Evolving Landscape of Intellectual Property That Impacts Valuation

A growing number of developments in the landscape of IP creation and commercialization are impacting IP valuations, or have the potential to do so.

Global BVU News and Trends January 2020

Business valuation news from a global perspective.

New Guidance in the IVS Update Effective Jan. 1, 2020

The IVSC’s International Valuation Standards have been adopted by more than 100 countries. Important components of the extensive recent update include guidance on deriving discount rates and a new section on complex financial structures.

2019 Key Valuation and Damages Cases

A discussion of the court cases that have dominated the conversation in 2019 among financial experts by making law or influencing attitudes on key valuation issues.

New Meta-Analysis Study Reveals Diminished Size Premium

There have been many studies on the size premium but with conflicting results. Now, the first “meta-analysis” of the size premium provides an estimate that is smaller than what many people believe, according to a new paper.

Using Industry Benchmarks to Establish Secure Negotiating Positions for M&A Purposes

M&A parties are often at odds with the valuation, causing many deals to ultimately fall apart. One solution to this dilemma is to select a multiple based on how the subject company compares to industry benchmarks. The authors include a discussion of a new resource: The Valuation Benchmarking Platform.

Musings on the Cost of Capital

A veteran appraiser presents an interesting retrospective on the cost of capital and offers some observations on current practice.

Latest Resources to Help Improve the Valuation of Financial Instruments

A recap of recent resources that have emerged, including some new credentialing, that are designed to improve this area of practice. This is the valuation profession’s response to the concerns of financial regulators and others around the world about the quality and consistency of financial instrument valuations.

Reports From Global BV Conferences: ICVPME, IVSC, IACVS, ICAEW

The “I” in all of these acronyms stands for “international,” and Business Valuation Update brings you some key takeaways from several recent global conferences.

BVU News and Trends December 2019

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

Global BVU News and Trends December 2019

Business valuation news from a global perspective.

Valuing a Financial Advisor’s Book of Business

A court may not immediately recognize the value of a financial advisor’s collection of client relationships. The author illustrates this based on a case in which he was one of the testifying experts and also discusses various perspectives on the valuation.

BVR and Duff & Phelps Cost of Capital Platforms Go Head-to-Head at VSCPA

Both platforms give similar results when estimating the cost of capital for private firms. They were put through their paces at a recent conference presented by the Virginia Society of CPAs.

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