Business Valuation Update

In the November 2020 issue:
  • Attorneys and Valuers Link Up at AAML/BVR Virtual Divorce Conference
  • Estimating a COVID-19 Marketability Discount for Small Businesses
  • Recap of the VSCPA Business Valuation, Fraud, and Litigation Services Conference
  • COVID-19 to Trigger More Requests for ‘Risky’ Calculation Reports, Expert Says
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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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Little-Known Resource Can Help Bolster Support for Projections

Projections used in business valuation have always been subject to scrutiny—and now more than ever. During the recent ASA International Conference, it was pointed out that many valuation analysts may not know of a resource that can be used to help support their assessment of projections.

Appraisal Disciplines Reveal Breaking Trends at the ASA Conference

Practitioners from five appraisal disciplines address how they are working in the current environment and their perspectives about trends in valuation over the next year.

Letter to the Editor: Commentary on Recent Statements by the IRS Regarding the Change to Appraisal Reviews

Former IRS manager Michael Gregory comments on recent statements from the IRS and ASA concerning a key issue with appraisal reviews prior to imposing a civil money penalty for valuation misstatements under IRC Section 6695A.

What the New Subchapter V in Bankruptcy Means to Business Valuers

Michael D. Pakter (a managing member at Gould & Pakter Associates LLC in Chicago) discusses the new niche subchapter of the Bankruptcy Code that creates an easier and less expensive path for small businesses to reorganize and survive.

Can You Do Two Valuations With the Same Date? Yes, Says Hitchner

A valuation done pre-COVID-19 may be obsolete, so can you update it using the same valuation date and factor in the impacts of the pandemic? Yes, says James Hitchner (Valuation Products and Services), and he believes doing so is not in conflict with the valuation standards.

Several Trends of Note in Valuation Cases in the United Kingdom

A number of recent court cases in the UK are important to valuation. Matrimonial decisions continue to introduce valuation concepts beyond “fair value,” and, on the topic of goodwill, a recent case went contrary to the expectations of most business valuers.

BVU News and Trends December 2020

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

Global BVU News and Trends December 2020

Business valuation news from a global perspective.

Attorneys and Valuers Link Up at AAML/BVR Virtual Divorce Conference

Coverage of several sessions that include tips on managing client expectations in uncertain times and the new “abnormal” with respect to executive compensation.

Estimating a COVID-19 Marketability Discount for Small Businesses

A framework of thinking for developing a marketability discount for a majority interest on a small business in the wake of the pandemic.

Sink or Swim: The New World of Virtual Testimony

Most people do not realize how different it is appearing in court through virtual technology compared to being there in person. Fortunately, some attorneys and valuation experts have gone through this experience and they share their advice on how to make the best of it.

Company or Damage Valuation in a Mediation Context

The number of online mediations has soared due to the pandemic. This article outlines the standard phases of a valuator-assisted mediation and the concept of the best alternative to a negotiated agreement (BATNA) and includes some real-world case studies.

BVU News and Trends November 2020

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

Global BVU News and Trends November 2020

Business valuation news from a global perspective.

Recap of the VSCPA Business Valuation, Fraud, and Litigation Services Conference

Timely topics include how BVFLS experts are accounting for the impact of COVID-19, reviewing a valuation report, an estate/trust update, and a new idea to boost your practice. This two-day event was sponsored by the Virginia Society of CPAs (VSCPA).

COVID-19 to Trigger More Requests for ‘Risky’ Calculation Reports, Expert Says

It’s a settled matter about whether calculation reports “can” be used, but “should” they be used is another issue. Veteran valuation expert Kevin Yeanoplos (Brueggeman and Johnson Yeanoplos PC) explores this concern in a session at the recent BVFLS conference sponsored by the Virginia Society of CPAs (VSCPA).

The Valuation of Convertible Notes Using a Binomial Model

The authors’ research reveals that there are numerous articles, chapters, and models with bad math, bad equations, notational errors, or undisclosed rounding in some equations. They present a version of the Goldman Sachs binomial model and suggest that valuators provide fully functional binomial models when requested so that reviewers can “look under the valuator’s hood.”

Pandemic Triggers Chances for Valuers in Exit Planning

Remarks from the AICPA ENGAGE conference on the timely opportunities for financial professionals in exit/succession planning. This article gives some basics on how valuation experts can leverage their experience into this type of consulting.

The Expert Witness Process: Tips for Valuation Practitioners

The author developed and taught the AICPA course in expert witnessing, and he shares his advice for the entire process, from securing the engagement to cross-examination.

This Deceptively Simple Tool Can Help Clients Forecast Cash Flow

Valuation and forensics expert Darrell Dorrell (Financial Forensics) offers an Excel spreadsheet you can give clients to help them keep a close eye on their cash flow during these tough times.

Back to Basics for Lost Profit Damages Calculations Amid COVID-19

Does the pandemic have an impact on the measurement of future lost profits, particularly where the underlying breach occurred before the pandemic arose? This is an area of law that could change as courts begin to face disputes in the context of a COVID-19 world. In the meantime, this article gives a primer on calculating lost profits damages.

From the Bench: 10 Warning Signals of Trouble With a Valuation Expert

It’s always very informative and helpful to listen to judges talk about the valuation cases they hear. At NACVA’s recent Business Valuation and Financial Litigation Super Conference, a panel of judges did just that—and they shared their views of when they detect potential problems with appraisers when they are on the witness stand.

BVU News and Trends October 2020

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

Global BVU News and Trends October 2020

Business valuation news from a global perspective.

How COVID-19 Is Impacting the IRS and Valuation Audits

Still reeling from the effects of the government shutdown and budget cutbacks, the pandemic has dealt another blow to the IRS that has affected how the agency selects and reviews tax returns that include valuations. A former IRS manager who dealt with valuations at the agency gives some interesting insights.

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