Global BVU News and Trends May 2020
Business valuation news from a global perspective.
The Valuation Paradigm of COVID-19: Using the DCF Method After an Economic Crisis
The challenge amid today’s market disruption is to revert back to the foundational elements of valuation and how to properly apply those “blocking and tackling” fundamentals during very untraditional times.
Volatility Adjustments for Industry, Size and Leverage
How well do you understand the theory and application of industry, size, and leverage adjustments for estimating equity volatility? Do you feel confident explaining it to a new analyst? A client? A judge? It may be time to get more confident. Join James Herr for a discussion of the basic concepts around applying volatility estimates in valuation, covering common pitfalls when calculating the basic volatility measure. Learn the differences between equity and asset volatilities, and ...
Structure, Valuation & Tax Insights for Logistics & Trucking Companies
Join Jaclyn Burket Frank and Ricky Castillo for an engaging trip into the world of logistics and trucking businesses. Discover the different types of entity structure along with the advantages and disadvantages of each structure. Learn how the 2018 tax law impacted each entity structure and common deductible/nondeductible expenses for the logistics and trucking industry. The industry-specific adjustments to consider along with specific questions to ask business owners to determine whether economic, governmental, and location ...
AICPA issues FAQs on valuing distressed or impaired businesses
Strong companies may see the current pandemic as an opportunity to fortify their balance sheets and other assets, according to the AICPA’s FAQs on Valuation Considerations When Valuing Distressed or Impaired Businesses.
Does business interruption insurance decrease company-specific risk?
Business valuers often ‘tic the box’ on property and casualty insurance policies as part of their management interviews.
No act of God excuse for Victoria’s Secret buyer—February agreement excepted pandemic
In the wake of COVID-19, a number of buyers have resorted to force majeure (aka act of God) clauses to withdraw from deals.
Alternate market-based valuation methods amid COVID-19
In order to use the market approach in the wake of the coronavirus, your approach will depend on the valuation date and the date the impact of COVID-19 was felt in the market.
Business interruption cases and the role financial experts can play
Filing a business interruption claim has become one of the go-to moves for businesses as they try to mitigate the impact of COVID-19. A discussion of two cases that were adjudicated just before the COVID-19 crisis came into relief explains the trajectory many claims, including claims arising out of the COVID-19 crisis, may take and points to opportunities for damages experts.
Valuation and Covid-19 Update: BVR Townhall and Q&A
In part two of this town hall-style event, Michelle Gallagher, Gary Trugman, Stacy Collins, and Harold Martin talk through key impacts of COVID-19 on valuation issues. From cost of capital to family law to guideline companies, the impact on the inputs, approaches, and the business we value is profoundly felt. Experts who have weathered financial crises before are doing a yeoman’s job of keeping current with the ever-changing information. Send early questions and comments to ...
Should you consider a special COVID-19 premium?
During a recent webinar, a question came up as to whether or not valuation analysts should be separately identifying a risk rate associated with the impact of COVID-19 on a subject company.
Global BV News: IVSC extends comment period on inventory guidance
The International Valuation Standards Council (IVSC), the independent standard-setter for the global valuation profession, has extended the comment period to June 30 for its exposure draft on the valuation of inventory.
Force Majeure: Examining the Post COVID-19 Intercompany Agreement Reality
As COVID-19 continues to shift everyday life and the global economy, accounting professionals are looking for information to help guide their clients through these trying times. These organizations will lean on their in-house experience and should pay close attention to the lessons learned during the 2008 market crisis. Force Majeure is a clause included within an agreement that is commonly referred to as the “Act of God” clause.
IVSC’s Darling describes how business valuation during COVID-19 differs from the 2008 financial crisis
The IVSC, in collaboration with RICS, released a new video looking at the impact of COVID-19 on global markets, geopolitics, and the global economy on 20 April.
In BVU article, Strickland suggests cost approach may be the ‘Cinderella’ of current crisis
The cost approach is normally accorded a lower status for going concerns, but Andrew Strickland advises valuers to think twice given the current crisis.
EU risk-free rate declines, and the market risk premium increases to 9.0%
A special edition (fifth) of the “European Capital Market Study” from ValueTrust was released last week.
IPEV offers guidance for 31 March valuations
The International Private Equity & Venture Capital Valuation Guidelines Board has issued special guidance for applying the IPEV Valuation Guidelines when estimating fair value at 31 March 2020.
Market Volatility and Its Impact on the Valuation Advisors Pre-IPO Database
The recent stock market volatility has ripple effects on pre-IPO studies, which are used to estimate a discount for lack of marketability (DLOM).
The Impact of COVID-19 on Restructuring, Insolvency & Impairment
The world of valuation has changed along with everything else. In this panel on the Impact of COVID-19 on Restructuring, Insolvency & Impairment, three experts will discuss the changing environment for valuation assignments. Craig Jacobson, Richard Peil, and Dan Korcyk each bring a unique perspective and will discuss three specific areas where valuation activity might increase due to the virtual shutdown of the U.S. economy. Finally, we will discuss topics related to performing valuations in ...
Hitchner shares his COVID-19 timeline
When was COVID-19 known or knowable for valuation purposes?
BizMiner launches free help for your small-biz clients
BizMiner, a provider of industry and geographic data business valuers use, has launched a public service called the LOOK UP! Initiative.
Global BV News: Cost of capital parameters in Europe as of March 31, 2020
ValueTrust has released a special edition (fifth) of its “European Capital Market Study” that serves as a comprehensive compilation of capital market parameters such as cost of capital and implied as well as historical risk premiums for European countries.
Sequel to BVR’s free town hall webinar May 6
By popular demand, BVR will hold a second free town hall webinar, Valuation and COVID-19 Update: BVR Townhall and Q&A, on May 6.
Business interruption cases and the role financial experts can play
To mitigate the impact of COVID-19, business owners have increasingly turned to business interruption insurance.
Healthcare Valuation in the Corona Virus Era: That Was Then, This Is Now
COVID-19 has impacted perhaps no industry in such a complex way as healthcare. Join Mark Dietrich in this discussion of items to consider before you forecast the likely impact on the healthcare industry of the current crisis. First, it is necessary to understand where the industry was before COVID-19 and then to understand what the crisis revealed about the allocation of resources. Second, you need to consider where future spending will be directed and how ...