Valuation Standards That Apply to Ethical Dilemmas With AI
Although the various valuation standards don’t specifically address artificial intelligence, certain ethical standards indeed apply, and they deal with integrity/objectivity, professional competence, confidentiality, due professional care, and sufficient related data. In a session at the ASA annual conference, Karen Lascelle (John Burk & Associates CPAs) reviewed the relevant standards from the ASA, AICPA, NACVA, and USPAP, and we’ve configured them into a chart.
BV News and Trends November 2024
A monthly roundup of key developments of interest to business valuation experts.
DOL to ‘heat up’ regs for ESOP valuations
Long-awaited regs from the Department of Labor on ESOP valuations are a “forthcoming attraction that will heat up a fair amount of our resources for the fall,” said Jeff Turner, acting deputy director of the Office of Regulations and Interpretations at the Employee Benefits Security Administration (EBSA), reports the American Society of Pension Professionals & Actuaries (ASPPA).
Tomorrow! Healthcare compensation case studies
Join Kathryn A. Taylor (ECG Management Consultants) as she presents two case studies of compensation valuation—one involving call coverage and one on medical directorship arrangements.
BV News and Trends October 2024
A monthly roundup of key developments of interest to business valuation experts.
Delaware’s Surprising and Inexplicable Appraisal of FairXchange
This appraisal decision has echoes of Edgar Allan Poe: a well-written story with a surprise ending. The sale of a private company was negotiated and forced through by a management that had no relevant experience but failed to use any professional financial advisors. The court expressly stated that the sellers left money on the table but nonetheless ruled that fair value was the deal price.
Court-appointed attorney can’t testify on stock gift valuation
In a Hawaii estate matter, one of the founders of the Foodland grocery chain made lifetime gifts of company stock to some of her children.
Valuation Considerations for Gift & Estate Tax
The transfer of estate assets from one generation to another can be complex depending on the business and personal holdings of the estate. The valuation of such is essential to the determination of the taxable portion of the estate and calculating the applicable estate tax exemption. Our valuation team will demystify the valuation process by discussing the aspects that go into the appraisal of the material assets of an estate, including any/all intangible assets, machinery ...
Sullivan v. Loden (II)
The U.S. District Court in this case excluded the value of an attorney who was appointed in a related state probate case and testified that the defendant’s valuations were unreliable. The district court determined that the proposed witness was not qualified to testify as to the efficacy of valuations. This case concluded that just because a proposed witness was an “attorney” “respected” as an estate expert did not make him or her qualified under Rule 702 to testify about business valuations when the proposed witness was not qualified in business valuation.
U.S. District Court (Hawaii) Excludes Testimony on Business Value From an Attorney Who Has No Valuation Skills
The U.S. District Court in this case excluded the value of an attorney who was appointed in a related state probate case and testified that the defendant’s valuations were unreliable. The district court determined that the proposed witness was not qualified to testify as to the efficacy of valuations. This case concluded that just because a proposed witness was an “attorney” “respected” as an estate expert did not make him or her qualified under Rule 702 to testify about business valuations when the proposed witness was not qualified in business valuation.
BV News and Trends September 2024
A monthly roundup of key developments of interest to business valuation experts.
Matthews critiques Delaware’s surprise-ending opinion in FairX
Edgar Allan Poe was a master of the surprise ending, but Judge Laster of the Delaware Chancery Court is giving him a run for his money in his recent decision in the FairXchange (FairX) case.
New valuation credential for healthcare compensation
A new credential is about to be launched for valuing the compensation of healthcare providers (physicians, physician assistants, and nurse practitioners).
BV News and Trends August 2024
A monthly roundup of key developments of interest to business valuation experts.
Be a volunteer! Consider the TAF BV Resource Panel
September 1 is the deadline to apply to join The Appraisal Foundation’s Business Valuation Resource Panel. The panel oversees the development of BV valuation advisories, provides input on exposure drafts, and offers insight on emerging issues or other significant matters.
FairX valuation: from bad to worse
In a statutory appraisal case, the Delaware Court of Chancery rejected two valuation approaches in favor of its own method, which had “seriously flawed” underpinnings.
Senators to DOL: Get moving on ESOP valuation rule
U.S. Senator Roger Marshall (R-KS) led a bipartisan letter calling on the U.S. Department of Labor (DOL) to complete a final regulation governing the “adequate consideration” exemption for employee stock ownership plans (ESOPs).
Reminder: Email your senator regarding DOL’s ESOP valuation rule
Regardless of whether your practice involves ESOP valuations, you will want to consider a request from The ESOP Association (TEA) to email your senator about signing a bipartisan letter being sent to the Department of Labor (DOL) about an important valuation rule.
Want to volunteer? Consider the TAF BV Resource Panel
September 1 is the deadline to apply to join The Appraisal Foundation’s Business Valuation Resource Panel.
Two BV Trends That Have Alarmed BVR’s ‘Power Panel’
A panel of thought leaders commented on two issues they say have raised some very loud alarm bells. One issue involves the methodology and analysis for estimating a discount for lack of marketability (DLOM) and the other issue concerns professional standards.
Action needed! Email your senator re: DOL’s ESOP valuation rule
Regardless of whether your practice involves ESOP valuations, you will want to consider a request from The ESOP Association (TEA) to email your senator about signing a bipartisan letter being sent to the Department of Labor (DOL) about an important valuation rule.
Hyde Park Venture Partners Fund III L.P. v. FairXchange, LLC
This was a case that, once again, adopted the deal price in a shareholders’ dissent appraisal proceeding. The judge was not satisfied with the experts’ methodologies. He noted the difficulty in valuing a startup in a business model that had not been tried before. Absent compelling evidence of value from either side, the court fell back on the deal price.
Chancery Court (Delaware) Adopts Deal Price—Deplores Valuation Methodologies
This was a case that, once again, adopted the deal price in a shareholders’ dissent appraisal proceeding. The judge was not satisfied with the experts’ methodologies. He noted the difficulty in valuing a startup in a business model that had not been tried before. Absent compelling evidence of value from either side, the court fell back on the deal price.
Brown v. Progressive Mt. Ins. Co.
In discussing and ruling on motions to exclude portions of testimony of three experts in a class action case against Progressive Insurance for breach of contract in determining the actual cash value to be paid in valuing a used car, the court provided well-reasoned decisions as to the application of FRE 702. It was in effect a tutorial.
U.S. District Court (Georgia) Rules on Various Motions to Exclude Testimony Under FRE 702 (A Tutorial)
In discussing and ruling on motions to exclude portions of testimony of three experts in a class action case against Progressive Insurance for breach of contract in determining the actual cash value to be paid in valuing a used car, the court provided well-reasoned decisions as to the application of FRE 702. It was in effect a tutorial.