Business Valuation Update
- BV Experts Embrace AI, See Its Promise
- A Very Engaging Audience at the ASA ESOP Virtual Conference
- AI Is Making Inroads at Business Valuation Practices
- RESEARCH UPDATE: Monthly Recap of Research Papers
Delaware’s Surprising and Inexplicable Appraisal of FairXchange
This appraisal decision has echoes of Edgar Allan Poe: a well-written story with a surprise ending. The sale of a private company was negotiated and forced through by a management that had no relevant experience but failed to use any professional financial advisors. The court expressly stated that the sellers left money on the table but nonetheless ruled that fair value was the deal price.
BVR Breaks New Ground With Debut of RADA
BVR has taken an important first step in deploying a new research tool that uses the latest technology. It’s called the Research and Data Assistant (RADA), and it has been rolled out to subscribers of the BVResearch Pro platform. RADA is designed to provide concise, summarized search responses and page references directly from BVResearch Pro PDF documents. Article includes a screen shot with some actual user queries and results.
IRS Warns Cannabis Firms: 280E Is Still Alive and Kicking
An IRS staffer says that cannabis firms cannot wake up yet from the 280E nightmare until rescheduling happens—although some firms are acting as if their troubles are already over. From the AICPA & CIMA Cannabis Industry Conference.
Connelly Lesson: A Good Buy-Sell Is Not Enough to Fix Value
Some insights on the Connelly U.S. Supreme Court case from exit planner Paul Hood and attorney Ed Morrow. In the case, the estate of a deceased owner got hit with tax penalties due to trouble over the buy-sell agreement and mandatory redemption on death that was funded with life insurance.
RESEARCH UPDATE: Monthly Recap of Research Papers October 2024
The featured paper is from 2021 but escaped our radar. The authors are Lauren A. Cooper (West Virgina University), James A. DiGabriele (Montclair State University), Richard A. Riley, and Trevor L. Sorensen (West Virgina University). Other papers examine an algorithm for PE IRR, assessing macroeconomic risk, global economic recovery from COVID, and the payment timing of deferred income taxes.
Letter to the Editor: Feedback on Paper Concerning Company-Specific Risk
Comments on a recent research paper as it relates to Total Beta and the Butler Pinkerton Calculator.
BV News and Trends October 2024
A monthly roundup of key developments of interest to business valuation experts.
Global BVU News and Trends October 2024
Business valuation news from a global perspective.
BV Experts Embrace AI, See Its Promise
Coverage of BVR’s AI in Business Valuation virtual conference includes an overview of the AI ecosystem, some examples of using AI in valuation practice, how to assess the impacts of AI when valuing a subject company, and how to use AI in marketing your practice.
A Very Engaging Audience at the ASA ESOP Virtual Conference
Speakers answered a lot of audience questions at the recent ASA ESOP Virtual Conference about feasibility studies, the valuation of transaction-related items (such as warrants, earnouts, etc.), the nuances of ESOP-related valuation reports, and upcoming proposed regs from the Department of Labor.
Don’t Be Afraid to Use a High Discount Rate in Your DCF for Early-Stage Firms
A case study of a recent engagement is another example of how challenging it can be to determine the enterprise value of an early-stage company because of the significant uncertainties that surround these firms. The article includes sources of data used for developing a discount rate.
AI Is Making Inroads at Business Valuation Practices
About 100 respondents answered poll questions about how they are using AI in their valuation practices.
The Continuing Evolution of the BUM
The author provides some very interesting reflections and perspectives, drawn from over 40 years of experience, and brings us up to date on this long-lasting method.
RESEARCH UPDATE: Monthly Recap of Research Papers September 2024
The featured paper is “Pricing Innovation: The Anchoring Effect in Patent Valuation” by P.E.N.G.F.E.I. Wang (BI Norwegian Business School). Other papers of interest to valuation experts cover topics including valuing startups, how marijuana legalization impacts cost of equity, and earnings growth rates.
BV News and Trends September 2024
A monthly roundup of key developments of interest to business valuation experts.
Global BVU News and Trends September 2024
Business valuation news from a global perspective.
ESOP Experts Worried Over Upcoming DOL Regs on Valuations
At the recent ASA ESOP Virtual Conference, a panel talked with some concern about upcoming proposed regulations from the Department of Labor on how to establish the fair market value of shares of a business to be acquired by an ESOP. They urged the audience to make their voices heard when the comment period opens (no word yet) and talked about recourse strategies if the final regs are problematic.
AICPA Wants Feedback on Partial Revisions to Cheap Stock Guide
A working draft of two updated chapters from the AICPA Valuation of Privately-Held Company Equity Securities Issued as Compensation Guide (the “cheap stock” guide) has been issued, and the AICPA would like some feedback by September 20. This is part of a broader forthcoming update of the 2013 edition of the guide.
The Changing Landscape of Intellectual Property Valuations in the Healthcare Industry
A Q&A format on how the changing landscape of protecting, managing, and, most importantly, valuing intangible assets affects companies in the healthcare and life sciences industry.
Valuation Report Excerpts Using Pepperdine to Estimate a Discount Rate
Sample language adapted from actual valuation reports using information from Pepperdine’s “2024 Private Capital Markets Report” to estimate cost of capital for a small business, including an adjustment for company-specific risk.
RESEARCH UPDATE: Monthly Recap of Research Papers August 2024
The featured paper is “How to Bring AI-Enabled Valuations to Meet Professional Duty of Care Standards?” by researchers from the University of Auckland. Other papers of interest to valuation experts cover topics including valuing startups, ESG impact on multiples, valuations of business development companies (BDCs), and inflation impacts on the CAPM.
BV News and Trends August 2024
A monthly roundup of key developments of interest to business valuation experts.
Global BVU News and Trends August 2024
Business valuation news from a global perspective.