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
Seismic Shifts Underway in Business Valuation Practice in the U.K.
More refined techniques are now sweeping away ideas and methodologies surrounding business valuation that have held sway for decades in the United Kingdom.
Takeaways From the 2018 ASA Advanced BV Conference
A wrap-up of the ASA’s Joint ASA 2018 Advanced Business Valuation and International Appraisers Conference in Anaheim, Calif.
10 Things to Know From the NACVA 2019 Conference
The importance of storytelling, a re-examination of the terminal value, the dangers of technology, cost of capital woes, online marketing tools, and more highlighted the 2019 Annual Consultants’ Conference presented by the National Association of Certified Valuators and Analysts (NACVA).
Global BVU News and Trends October 2020
Business valuation news from a global perspective.
Three Generations of Valuation Experts Share Their Views
Business valuation is still a young profession, but it has already produced several generations of professionals. Fortunately, some of the pioneers are still with us. Business Valuation Update recently had the unique opportunity to talk with the most pre ...
Global BVU News and Trends March 2021
Business valuation news from a global perspective.
BV News and Trends April 2022
A monthly roundup of key developments of interest to business valuation experts.
Report from ACG: Transaction Costs and Risks Rise, Buyers Change
BVU has attended three of the major “intermediary” meetings in the last several months, beginning with the IBBA and AM&AA annual meetings. But the dean of the group is InterGrowth, held last month in San Diego. This is the largest gathering of members and ...
TAF BV Roundtable: Could Joint Best Practices Guides Be the Next Step Forward for the Profession?
The April 23 meeting of The Appraisal Foundation Roundtable in Washington, D.C., was a unique and first-time attempt to get leaders from all the related valuation communities—including users—in one room. The 15-member panel and those who attended the roun ...
Two Articles Addressing Firm Quality and Its Impact on the Size Effect
The authors discuss two recent papers that present the concept of firms’ quality and show that it plays an important role in understanding the size effect. Also discussed are papers that present a differing view.
Growing Status of Fair Value Sparks Record Attendance at ASA FV Conference
The growing importance of fair value for financial reporting and the ongoing efforts to improve the quality in this area of practice triggered a sell-out for the ASA/USC 13th Annual Fair Value Conference held May 10 in Los Angeles. Here’s a recap.
BVU News and Trends May 2019
A monthly roundup of key developments of interest to business valuation experts.
Global BV News and Trends February 2022
Business valuation news from a global perspective.
‘Absurd’ CAPM, Size Impact, ‘Sense Checks,’ and Family Firms Highlight the ICAEW Conference
Excellent speakers and interesting topics were on hand at the valuation conference of the Institute of Chartered Accountants in England and Wales (ICAEW) in the United Kingdom.
Total Cost of Equity or Company-Specific Risk—A Better Use for the BPM?
The Butler Pinkerton Model™ Total Cost of Equity and Public Company Specific Risk CalculatorTM (the BPM Calculator) highlights two outputs: the total cost of equity (TCOE) and the company-specific risk premium (CSRP) for publicly traded guideline companie ...
A Timely New Study of Bankruptcy Prediction Models from Morningstar
In light of the current economic turmoil and continuing uncertainty in credit markets, it s even more important that business appraisers accurately identify distressed companies and their potential for default. Developing cost of capital (discount) rates in this economic environment presents an additional challenge. Recently, Morningstar s valuation research team reexamined two bankruptcy prediction models the Z Score and Distance to Default models and assessed their predictive power. We also studied a simple, single-variable model based on the ratio ...
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.
25 Tips on Dealing With COVID-19 From the NACVA Conference
COVID-19 was a hot topic of discussion in a number of the sessions at the NACVA and the CTI’s 2020 Business Valuation and Financial Litigation Super Conference, which was held online over five full days (June 15-19).
BV News and Trends December 2021
A monthly roundup of key developments of interest to business valuation experts.
Discount Rate, Risk & Economic Damages: Practical Considerations
When calculating damages awards in litigation, it is undisputed that the plaintiff’s projected economic losses must be discounted to their present value to avoid over-compensating for the harm caused by a defendant’s wrongful act.
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.
Data About the Size Premium Challenge Conventional Wisdom
Michael A. Crain, DBA, CPA/ABV, ASA, CFA, CFE, works primarily in the areas of business/ economic damage measurement, valuation of busi¬nesses and financial assets, and forensic accounting. He recently spoke with BVU about research he has been doing in t ...
The Implied Private Company Pricing Model (IPCPM) Ko = (FCFF1 / P) + g
Editor’s Note: The authors have developed a model designed to be more reliable than the build-up method for estimating the cost of capital of a small privately held business. This model uses the authors’ new Implied Private Company Pricing Line 2.0 (IPCPL ...
The Implied Private Company Pricing Line 2.0 K0 = (FCFF1 / P) + g
Most business appraisal assignments are for private companies with revenue less than $10 million. Current costs of capital (K0) estimation methods rely almost entirely on public security returns. Small privately held companies are different from public eq ...
Determining a Distressed Debtor Company Discount Rate (Part 2)
The cost of capital represents the required return that must be earned if the value of the entity at issue is to remain unchanged. Cash flows are discounted at the cost of capital to determine the value of the emerging entity. A debtor company’s capital ...