Highlights of the November 14 issue:
  • New tax law gets the spotlight at the AICPA FVS conference
  • Expert's inability to defend income analysis 'is decidedly troubling,' court says
  • FAQs posted for new cost of capital platform
  • Newpaper find scant evidence of a size effect
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Be the first to know about changes affecting the business valuation profession. The BVWire ezine brings you current news every Wednesday. From the buzz of the latest professional conference or the best new financial research resources, to the impact of last week's tax case or to this week's IRS, FASB or Appraisal Foundation announcement, BVWire guarantees you won't miss a thing. It's free, it's fast to read, and it contains everything you need to know about the evolving business valuation profession.

New tax law gets the spotlight at the AICPA FVS conference

BVWire attended the AICPA Forensic & Valuation Services Conference November 5-7 in Atlanta where there were a number of good sessions on the Tax Cuts and Jobs Act (TCJA), which impacts “everything” in valuation.

Expert’s inability to defend income analysis ‘is decidedly troubling,’ court says

Judges are alert to incongruities in valuations, as is clear from a recent condemnation case in which landowners hired three experts to calculate the compensation owed to them.

New paper finds scant evidence of a size effect

“The bottom line is that after addressing the facts and fictions of the size effect, we find neither strong empirical evidence nor robust theoretical support for a prominent size premium.”

Alternative payment models in healthcare

A significant impact on the revenue picture for healthcare providers is coming from alternative payment models, such as value-based payments and bundled payments.

Latest study of private equity valuations

Private equity firms paid a median valuation multiple of 11.9x EBITDA for new investments during the first nine months of 2018, according to the “2018 Q3 Private Equity Valuations Report” from Murray Devine Valuation Advisors.

Global BV News: Serbia to translate iiBV courses

The International Institute of Business Valuers (iiBV) and the National Association of Valuers of Serbia (NAVS) signed a new licensing agreement for iiBV courses that will further promote the advancement of the business valuation profession in Eastern Europe.

BV movers . . .

Dan Peters will be the managing partner of Valentiam, a new firm formed by valuation and transfer pricing experts; Carl Hoemke will helm valuation services, and the transfer pricing partners are Dan Peters, Clark Chandler, Sean Faulkner, David Talakoub, and Jared Walls.

CPE events

Portfolio Equations and Applications in Valuation (November 15), with Gary Schurman (Applied Business Economics).

New and Trending LinkedIn Discussions

Your discussion could be featured here.

FAQs posted for new cost of capital platform

A set of FAQs for BVR’s Cost of Capital Professional (CCP) has been added to the webpage that explains the new independent service for estimating the cost of equity.

Board of advisors shapes up for BVR’s new cost of capital platform

Experts from the who’s who of the business valuation world have joined the advisory board for BVR’s Cost of Capital Professional (CCP), the new independent service for estimating the cost of equity.

Business valuations need to preserve the human element

“If we remove the human element, our valuations will be nothing more than computer-generated nonsense,” writes Robert E. Kleeman Jr. (OnPointe Financial Valuation Group LLC) in Business Valuation Update. Kleeman, who has been in the BV world for over 40 years, says a lot has changed, including more of a reliance on data and a move away from using judgment, common sense, and reasonableness.

Damodaran criticizes Netflix’s business model

A recent New York Times article delves into the astonishing growth of Netflix, the video streaming service, and names Professor Aswath Damodaran as one of the few analysts who doubt the company’s business model is sustainable.

New Forbes list points up right of publicity issue

When a celebrity passes away, a large chunk of value in the estate may come from the “right of publicity,” which is a form of intellectual property that covers an individual’s name and likeness.

Home health and hospice M&A activity soars

For three quarters in a row, there have been at least 20 publicly announced acquisitions of home health or hospice companies, a much higher quarterly volume than during most of 2017, according to new data from HealthCareMandA.com (Irving Levin Associates).

AICPA releases working draft on credit losses

The AICPA’s Financial Reporting Executive Committee has released for public comment a working draft on accounting issues associated with the implementation of FASB Accounting Standards Update No. 2016-13, “Financial Instruments—Credit Losses” (issued in June 2016), which “provides a new current expected credit loss (CECL) model to measure impairment for financial assets (and instruments) measured at amortized cost.”

EOU: Solid growth in U.S. economy

The Leading Economic Index increased 0.5% in September, coming in at 111.8 points, the 12th consecutive month of gains, according to the September 2018 Economic Outlook Update (EOU).

Global BV News: KPMG Germany releases 2018 cost of capital study

This year’s study from KPMG includes 276 companies: 216 from Germany, 30 from Austria, and 30 from Switzerland. Among the findings: the average WACC across industries is 7% (same as the past three years); the average risk-free rate increased from 0.9% to 1.3%; and the market risk premium “remains almost stable,” at 6.5% (Germany), 6.7% (Austria), and 5.9% (Switzerland).

Global BV News: OIV BV conference in Italy November 12

The Seventh OIV Business Valuation International Conference will be held at Bocconi University (Aula Magna) in Milan, Italy, on November 12.

BV movers . . .

Ethan A. Lee, CPA, ABV, CFF, has joined Cooper Norman CPAs & Business Advisors as a partner based out of the firm’s Idaho Falls, Idaho, office.

CPE events

Portfolio Equations and Applications in Valuation (November 15), with Gary Schurman (Applied Business Economics). Part of BVR’s Special Series on Advanced Modeling and Methodologies.

New and Trending LinkedIn Discussions

Your discussion could be featured here.

BVR christens new platform for estimating the cost of capital

The Cost of Capital Professional is the name chosen for BVR’s new, simple, independent service for estimating the cost of equity.

Hot-button issues at BV firms large and small

In the days before the recent Joint ASA 2018 Advanced Business Valuation and International Appraisers Conference in Anaheim, Calif., the ASA held various classes as part of its accreditation process.

Private-company EBITDA multiples down sharply in 2Q18

In the second quarter of 2018, EBITDA multiples (median selling price/EBITDA) for private companies plummeted to 2.8x, the largest decline reported in recent years, according to BVR’s DealStats Value Index (DVI).

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