How Should You Deal With COVID-19? 10 Tips From the NACVA Conference
The first major multiday, multitrack conference of the year, the NACVA and the CTI’s 2020 Business Valuation and Financial Litigation Super Conference, was held online over five full days in June. Business Valuation Update attended, and we found excellent speakers and interesting sessions, and the technical details all went smoothly. COVID-19 was a hot topic of discussion in a number of the sessions, so, here we present 10 takeaways on dealing with the pandemic’s impact on business valuation.
What do KPMG and BDO have to say about current valuation and forecasting approaches?
COVID-19 dominates a lot of the discussion in the latest edition of KPMG’s 3Q2020 International Valuation Newsletter (IVN), though, as editors Johannes Post and Rolf Langenegger note, it ‘is not the only issue.’ BVWire—UK readers looking for a good summary of the effects the pandemic has had on UK and global markets should turn here, even though the effects on private companies, the LSE, and other markets are now familiar to everyone.
What factors contribute to inconsistent business valuation multiples?
Three professors at the Leipzig Graduate School of Management reviewed 1,149 recent private equity cross-border transactions to determine the consistency of the business valuation metrics.
Leigh Miller says valuation ‘ranges’ still raise questions with auditors, even during COVID-19
Using multiple forecast scenarios has been a commonly practiced approach to market volatility—and many UK business valuers are now saying that it should be used more widely.
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).
Understanding the Science of COVID-19 Is Key to Assessing Valuation Impacts
For the economy to recover, the origin, transmission, and “hot spots” related to the coronavirus have to be understood. Much of the economy is highly localized, so the nightmare of the spreading virus will impact future cash flow of the smaller businesses most valuation experts work with. This is an excerpt from the new “BVR Briefing: The Real Story of COVID-19 for Valuation and Litigation Experts.”
Cost of Equity and COVID-19: What to Do? (Update)
Using a forward-looking approach, implied volatilities, and total beta to determine an appropriate cost of equity to supplement one’s analysis during today’s unprecedented times.
10 Time-Tested Ways to Build a Defensible Divorce Valuation
Business valuations prepared for divorce purposes can be much more challenging than valuations can be for other purposes because the rules differ among jurisdictions. There are no clear valuation guidelines for divorce in most states. For example, there’s no specific definition of value in state statutes governing divorce. Also, divorce courts exercise a great deal of discretion—even if there is an abundance of judicial precedent (which can be confusing and contradictory).
One way to analyze a COVID-19-shuttered firm
If you haven’t already, you will probably get this question from a client: “The pandemic forced my business to shut down."
CCF being abandoned for DCF, NACVA speakers say
The capitalized cash flow (CCF) method has been all but abandoned for the time being in favor of the discounted cash flow (DCF), points out Chris Hamilton (Arxis Financial Inc.).
How can you get BV CPD during COVID-19?
The short answer is ‘virtual.’
Can you simply reduce the value of all private companies in the UK? Scottish Mortgage and IPEV say yes.
Investment trust Scottish Mortgage, managed by Baillie Gifford, provided a simple solution in April by cutting the value of private companies in its portfolio to recognise the fact that private-company valuations are not insulated from public markets.
Adjusting the Gordon growth model for cross-border valuations
A new research study—‘International Valuation: A Proposed Method Using the Constant Perpetual Growth Model,’ by Thomas J. O’Brien (University of Connecticut—Department of Finance)—attempts to reduce valuation mistakes introduced by cross-border foreign exchange and cash-flow risks.
Pandemic, ESOP Woes, Fair Value, Crypto, and Fraud at NYSSCPA Conference
The 2020 conference season is underway, and Business Valuation Update was on the scene—virtually, of course—for the New York State Society of CPAs Business Valuation/Litigation Services Conference webcast live from New York City May 18.
BVResearch Pro Tackles Tricky Search for Guidance on a 50% Interest
During a webinar, an appraiser challenges BVR’s BVResearchPro platform to find court cases, articles, or any other material that discusses a marketability discount for a 50% ownership interest in a private company.
New twist on valuing small promissory notes
For the past few years, Bruce Johnson (Munroe, Park & Johnson Inc.) has been using data from business development corporations (BDCs) to develop a base rate of interest for small (under $10 million) privately held promissory notes, he explained during a recent webinar.
BVR Briefing – The Real Story of COVID-19 For Valuation and Litigation Experts
September 2020 PDF
Mark Dietrich
Business Valuation Resources, LLC
COVID-19 takeaways from NACVA’s Virtual Super Conference
In the last issue, we gave you some takeaways from the NACVA and the CTI’s 2020 Business Valuation and Financial Litigation Super Conference that was held online over five full days (June 15 to June 19).
Company-specific risk webinar gets help from BVResearch Pro
During a recent webinar, it was noted that there are various models for estimating company-specific risk, such as Trugman, Black/Green, Warren Miller, and Butler/Pinkerton.
New BVU article notes increased use of discounted cash flow in UK business valuations
‘There had been a consistent thread running through UK Court decisions of a preference for broad professional judgement over mathematical precision,’ says Andrew Strickland (FCA) in his new analysis, which appears in the July issue of Business Valuation Update.
How would a wealth tax impact business valuation?
The FT ran a long interview with Gus O’Donnell last week, saying that ‘a UK wealth tax is more likely than ever because of the reordering of politics caused by the coronavirus pandemic.’
Assessing Additional Economic Risk Due to COVID-19
A template that can serve as a framework of thinking about the impact of the coronavirus on a subject company. The author presents a series of questions that help assess the short- and long-term risks with respect to the subject company’s industry, physical operations, financial issues, and firm management.
Cost of Equity and COVID-19: What to Do?
A forward-looking approach, implied volatilities, and total beta are used to determine an appropriate cost of equity during “unprecedented” times such as we have now to supplement one’s analysis.
Alternate Valuation Methods in the Era of COVID-19
The authors address the impact of COVID-19 on the capital markets and offer alternate valuation methods that should be considered in these turbulent times.
Takeaways from the NYSSCPA BV/Litigation conference
Conference season is here but, of course, in virtual form due to the pandemic.