Business Valuation Update
- How to Review a Report’s Valuation Methodology
- Ideas for Solving Two Problems in the BV Profession
- How Do Your Firm’s Benefits Stack Up?
- Using Rule of Thumb Data to Uncover Cooked Books
Indiana Appellate Court Includes Enterprise Goodwill of Wife’s Businesses in Marital Estate
In this divorce matter, the Indiana appellate court included enterprise goodwill of the wife’s business in the marital estate. The court-appointed, at the husband’s request, expert testified as to his conclusion of value using an income approach and calculating the amount of enterprise goodwill while excluding personal goodwill. The wife objected to the expert’s value but provided no evidence of her own determination of value.
Valuers Converge (in Person!) at the ASA International Conference
This is a recap of some sessions covering small promissory notes, shareholder disputes, sports businesses, valuing defensive patents, IRS news, competing appraisals, and more. Over 600 valuation experts from all disciplines came together for the American Society of Appraisers’ International Conference in Las Vegas, October 24-26. This was a hybrid event, and many of the attendees were on-site.
An Inside Look at the Landmark ESOP Valuation Case
For over a decade, the Department of Labor has not lost a major ESOP case on a valuation issue, but its winning streak ended with Walsh v. Bowers. The case involves many key valuation issues, and Ken Pia (Marcum LLP) and Ian Rusk (Rusk O’Brien Gido + Partners LLC), expert witnesses for the defense, give their insights.
Items of Interest Gleaned From the ASA Conference Networking Ops
BV firm staffing troubles, Shannon Pratt’s video remarks about his new book, a new app for fractional interests, a heightened interest in businesses with a real estate component, and help needed in developing a new module for the Cost of Capital Navigator are just some of the things we learned outside the regular sessions at the ASA conference—in and around the exhibit hall and during the many networking breaks.
Letter to the Editor: A New Development in Personal Goodwil
Remarks and comments from BVR’s legal editor on a previous article that discussed Florida’s proposed legislation to clarify the value of goodwill in the marital interest of closely held businesses.
How to Explain Personal Goodwill to a Trier of Fact for a Divorce Valuation
This is an excerpt from the author’s upcoming sixth edition of Understanding Business Valuation, which will be available from BVR in early 2022.
Physician Distribution, Mobility, Fair Market Value, and Compensation Surveys: An Update
This article updates the author’s peer-reviewed research on the geographic distribution of physicians in the United States, including some key commentary from CMS about the use of surveys for Stark fair market value.
BV News and Trends December 2021
A monthly roundup of key developments of interest to business valuation experts.
Global BV News and Trends December 2021
Business valuation news from a global perspective.
In a Divorce Case, the California Court of Appeal Rejects Discount for Taxes Not Immediate and Specific But Allows a DLOM
In this divorce case, on appeal, the California appellate court rejected a discount for taxes not immediate and specific and allowed a DLOM regarding the value of the wife’s one-half interest in the jointly owned business. The court also determined that “the [trial] court impliedly made the factual findings necessary to support its ruling regarding Cynthia’s breach of fiduciary duty claim.” Finally, the appeals court determined that the trial court had the authority to set its own terms for payment of the equalization amount to the wife.
Walsh v. Vinoskey
This case covered the appellate decisions regarding the well-publicized Vinoskey ESOP case. The appellate court affirmed the district court in deciding that the company owner had extensive knowledge about the company and its prior valuations, and thus it was plausible to infer that “something was off.” There was no clear error in the district court finding that the owner violated ERISA. The appellate court also allowed an offset to damages for the debt the owner forgave.
Statistical Methodologies for Analyzing Active and Passive Appreciation
A rundown of the existing quantitative models that have been developed that separates the active and passive appreciation of a closely held business involved in a marital dissolution case. The models seek to statistically identify market forces that reasonably cause changes in the value of assets.
‘Survey Says’ for FMV of Physician Compensation Is on Its Last Legs
The use of compensation surveys to determine the fair market value of physician compensation is seriously flawed, a position well-known expert Mark Dietrich has long maintained. Plus, recent government regulations confirm his position. He offers an alternate methodology.
Recap of the VSCPA Forensic and Valuation Virtual Conference
Topics at the Virginia CPAs’ event included COVID-19, the use of statistics for lost profits, key federal tax cases, personal goodwill, forensics, reasonable compensation, and cybercrime.
How COVID-19 Has Impacted Insurance Agencies and Brokerages
Industry intelligence is excerpted from the new guide, What It’s Worth: Valuing Insurance Agencies.
Benchmark Data on Contract-Based Intangible Assets and Remaining Useful Lives
Many contract-based relationships represent identifiable intangible assets that require valuation apart from goodwill. The data here are from the third edition of Benchmarking Identifiable Intangibles and Their Useful Lives in Business Combinations, which includes data from almost 16,000 purchase price allocations.
Economy, Cannabis, Physician Pay, SPACs, and Expert Testimony Among the Hot Topics at the NJCPA BV Conference
Key takeaways from the 2021 New Jersey CPA Society’s Business Valuation and Litigation Services Conference are included.
BV News and Trends November 2021
A monthly roundup of key developments of interest to business valuation experts.
Global BV News and Trends November 2021
Business valuation news from a global perspective.
Court of Appeals Upholds Tax Court—Taxpayer Gifted a Percentage of Partnership Interests, Not a Fixed Amount
Taxpayer appealed a Tax Court ruling that she gifted a percentage of partnership interests and not a fixed amount of value. As a result, when the IRS determined the FMV of those interests, the Taxpayer was left with a gift tax deficiency.
Florida’s Proposed Change to Goodwill Could Set a Precedent
The Family Law Section of the Florida Bar is proposing legislation to clarify the value of goodwill in the marital interest of closely held businesses. The authors envision that this proposed legislation could set a precedent for future family law matters throughout the United States.
Good News: Key Research on Private Cost of Capital Is Back
On the brink of ending its long run, the Private Capital Markets Project from Pepperdine University has secured funding to continue its ongoing survey of expected rates of return of providers in the private capital market.
Updated Data Help Appraisers With RULs of Intangible Assets
To estimate the expected remaining useful life (RUL) of an intangible asset, it can be helpful to see how other appraisers have assigned RULs to similar assets in the subject industry. Data on 18 identifiable intangible types (also broken down by industry) culled from almost 16,000 purchase price allocations (PPAs) have been assembled into the third edition of Benchmarking Identifiable Intangibles and Their Useful Lives in Business Combinations.
Warning to Business Valuers Looking to Use New ESG Ratings
A hot topic today is environmental, social, and governance (ESG) factors and how to reflect the impact of these factors in business valuations and financial reporting. Data are starting to emerge to help quantify the impact of ESG—but analysts need to be careful in using these data.
Premium Gap Closes Between Strategic and Financial Acquisitions
The difference between the premium strategic buyers pay for acquisitions versus what financial buyers pay has decreased, according to recent data in the Factset MergerStat/BVR Control Premium Study.