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
Solving the Blockage Discount Dilemma
The International Glossary of Business Valuation Terms defines “blockage discount” as “the amount or percentage deducted from the market price of a publicly traded security to reflect the decrease in per share value of a block of those securities that is ...
Tax Affecting S Corporations: It’s Not a Matter of Whether. It’s a Matter of When
The propriety of tax affecting S corporations is not a question of right or wrong; rather, the question is when it is appropriate to tax affect S corporations in business appraisals. The standard of value required determined the answer. Under the fair mar ...
Discounts, Tax Affecting, & Fast Appeals: Insights from Recent IRS Roundtable
“It shouldn’t be any surprise to you that the number one issue we deal with is the reasonableness of discounts, most often in estate and gift tax cases,” Susan Kurzweil, CPA, ASA, and IRS national business valuation issues coordinator, told attendees at ...
The Top Valuation and Damages Cases of 2020
Our pick of valuation-related court cases includes state and federal court decisions covering many areas of law that dealt with novel issues of law or, in some way, enhanced our understanding of valuation and damages issues as they arose in a litigation setting.
IRS challenges to FLPs and family LLCs
This article is extremely useful in summarizing the areas of attack by the IRS, as well as offering good advice on how to avoid attacks.
IRS proposes regs to start gift tax statute of limitations
Adrian presents a straightforward explanation and discussion, from a business appraiser's point of view, of the requirements and pitfalls that the IRS proposes to impose in order to trigger the three ...
Courtesy of the IRS: 22 Ways to Avoid Appraisal Missteps
“I’m speaking to you as an appraiser,” Michael Gregory, ASA, AVA, and a current territory manager (Engineers and Appraisers) with the Internal Revenue Service, told a packed general session of some 1,400 attendees at the recent AICPA/ASA National Busines ...
Three Court Cases You Must Read Before Writing Your Next Valuation Report
Former IRS officials give their insights into the thinking of the IRS on business valuations. This was a session at NACVA’s recent 2021 Business Valuation and Financial Litigation Hybrid and Virtual Super Conference.
Bogdanski Compares Recent ‘Baffling’ FLP Rulings
In his annual lecture on recent developments in federal tax valuation in Portland, Ore., Professor John Bogdanski (Lewis & Clark Law School) said the latest cases concerning family limited partnerships (FLPs) should “encourage” taxpayers—as well as their ...
Book Review: Valuing a Business—The Analysis and Appraisal of Closely Held Companies, 6th Edition
The new edition of Shannon Pratt’s book, which gives a heavy dose of theory and has been updated by a team of 67 contributors and published by the American Society of Appraisers, is reviewed.
SRO Crowd Sees Latest Update to Leading Pre-IPO Study
The largest audience for a BVR webinar in recent memory watched as Brian Pearson put the Valuation Advisors Lack of Marketability Discount Study through its paces. Pearson, the creator of the study, discussed new data added in 2019, misconceptions and criticisms of pre-IPO data, and uses for the data that extend beyond estimating a DLOM.
Has the Size Effect Disappeared?
Many researchers have documented that the size effect has diminished since the 1980’s, says Mike Crain, speaking at the AICPA National Business Valuation Conference in DC. He offered the following academic studies on this point: • Eleswarapu and Rein ...
Normalizing Adjustments--Time to Revisit
For most valuations, adjusting entity-level earnings to develop control and minority interest values has become a generally accepted business valuation practice. This is a good thing. It frees us from extrapolating data from questionable control premium s ...
New Study Reveals BV Research Sources of Choice
A survey of business valuation firms asked about research tools used for industry analysis, transactions, premiums and discounts, cost of capital, guideline public company analyses, compensation, valuation-related case law, and more.
Valuers Stand Ground in Clash Over Purchase Price in SPAC Merger
A recent SPAC merger triggered a strong disagreement between a national valuation firm and the merged entity over the fair value of equity consideration issued for the target company. A special purpose acquisition company (SPAC) is a shell company that raises capital in an IPO and then acquires an operating company to form a new merged entity.
Takeaways From ASA’s ESOP Virtual Conference
ESOP valuation basics, sell-side transactions, issues with mature ESOPs, and common critiques with valuations in litigation were the topics of discussion at ASA ESOP Virtual Conference.
FAS 157: Pathways and Pitfalls in Fair Value of Complex Investments
FAS 157, conceived in times of easy credit and a bubbly stock market, was born at a time of roiled equity and credit markets and a torrent of lawsuits, among them, those alleging mispricing of exotic securities. The usefulness of FAS 157 is likely to be ...
Control premiums and minority discounts: the need for specific economic analysis
The traditional "levels of value" chart is applicable in some situations, but not all. In this article, the 30-year business valuation veteran challenges the conventional procedure, explains its short ...
Update on DLOM, Fair Value, PTEs at NYSSCPA BV Confab
The 2017 conference season has started! BVR attended the annual business valuation conference of the New York State Society of CPAs (NYSSCPA) in New York City. As usual, it covered some of the profession’s hottest topics. Committee chair Jeffrey Gibralter ...
Proposed Sec. 2704 Regs Fly in the Face of BV Theory and Tax Law
For many years, the Internal Revenue Service has argued that business valuation adjustments when applied to family-controlled entities are utilized merely to reduce the gifted or inherited asset. Valuation experts, accountants, and attorneys contend that ...
2006 USPAP Focuses on Credibility, SR-9 Holding Period Requirements and More
The 2006 edition of USPAP—the Uniform Standards of Professional Appraisal Practice, published by the Appraisal Foundation (Washington, D.C)—are now effective as of July 1st. Unlike prior updates, the revisions to USPAP 2006 are substantial and require ca ...
View from Tax Court: Daubert, DCF, and Five ‘Red Flags’ for a Report
Relevance and reliability: two simple concepts that have become increasingly difficult to interpret in the era of Daubert and ever-evolving BV professional standards, approaches, and analytical techniques. In BVR’s 4th Annual Tax Summit, held last fall an ...
Abraham and Hillgren: Different approaches to Section 2036(a) valuation
This article identifies new challenges and responsibilities for business appraisers in the arena of valuation for pass-through entities such as family limited partnerships (FLPs) and limited ...
Exclusive Survey Reveals BV Research Sources of Choice
Information is the lifeblood of a business valuation practice. Your credibility and competitive advantage hinges on the sources of data you use. BVR recently collected data concerning research sources valuation experts rely on most. BVU has examined the p ...
A simplified method to value an S corp minority interest
This article proposes a method for valuing a minority interest in an S corporation.