In Mandatory Buyback, Indiana Appeals Court Disallows Use of Discounts
In dispute about valuation of terminated shareholder’s minority interest, appeals court finds the trial court erred when it allowed discounts for lack of control and marketability; under controlling case law, discounts are inappropriate where the buyback is mandatory and to the controlling party.
Hartman v. BigInch Fabricators & Construction Holding Co., Inc. (Hartman I)
In dispute about valuation of terminated shareholder’s minority interest, appeals court finds the trial court erred when it allowed discounts for lack of control and marketability; under controlling case law, discounts are inappropriate where the buyback is mandatory and to the controlling party.
Latest Update on Proposal to Upend Goodwill Accounting
Goodwill remains a very important valuation topic globally this year, and Business Valuation Update continues to cover the responses to initial efforts in the consideration of whether to upend the current goodwill impairment model and revert back to one of amortization of the world’s goodwill assets.
BVU News and Trends April 2020
A monthly roundup of key developments of interest to business valuation experts.
SEC proposes a framework for fund valuation practices
The SEC has issued a proposed rule, Good Faith Determinations of Fair Value, that would “establish requirements for determining the fair value in good faith of a fund’s investments and would permit boards to assign the determination to the fund’s investment adviser, subject to board oversight and certain other conditions.”
Reynolds American Inc. v. Third Motion Equities Master Fund Ltd.
In appraisal action involving merger of public (tobacco) company, court, guided by key Delaware court decisions, says deal price best reflects fair value and represents upper limit; contemporaneous valuations based on comparable companies, precedent transactions, and DCF support use of deal price.
North Carolina Court Says Deal Price Represents Upper Limit of Tobacco Company’s Fair Value
In appraisal action involving merger of public (tobacco) company, court, guided by key Delaware court decisions, says deal price best reflects fair value and represents upper limit; contemporaneous valuations based on comparable companies, precedent transactions, and DCF support use of deal price.
Global BV News: IPEV issues special guidance for March 31 valuations
The International Private Equity & Venture Capital Valuation Guidelines Board (“the IPEV Board”) has issued special guidance with respect to applying the IPEV Valuation Guidelines when estimating fair value at March 31, 2020, which will be “very challenging.”
30 April deadline for comments to IVSC on IVS 230—valuing inventory
The IVSC’s newest IVS 230 Inventory Exposure Draft tackles several themes, with particular attention to changes in the top-down method.
Magarik v Kraus
In buyout dispute, court rejects departing shareholder’s valuation based on income and market approach, where DCF model relied on company projections used for a bank loan that were never realized and, based on evidence, were “not accurate”; court says market approach used “incorrect comparables.”
Court Discredits Valuation Based on Unrealistic Projections and Incorrect Comparables
In buyout dispute, court rejects departing shareholder’s valuation based on income and market approach, where DCF model relied on company projections used for a bank loan that were never realized and, based on evidence, were “not accurate”; court says market approach used “incorrect comparables.”
Goodwill Amortization Controversy and CEIV Highlight Fair Value in 2020
Mark Zyla (Zyla Valuation Advisors) gives some highlights of what’s on the front burner for fair value in 2020, including issues surrounding the FASB’s invitation to comment on the impairment of goodwill, an important update to the Certified in Entity and Intangibles Valuation (CEIV) credential, the increasing globalization of the profession, and upcoming guidance.
BVU News and Trends March 2020
A monthly roundup of key developments of interest to business valuation experts.
Global BVU News and Trends March 2020
Business valuation news from a global perspective.
Coronavirus fallout impacts the valuation community
The unpredictable coronavirus is disrupting work plans of valuation and accounting firms and impacting the global market.
Synergy deduction purely academic in new Delaware appraisal ruling
In a statutory appraisal case that involved the sale of a publicly traded company to a privately held entity, the Delaware Court of Chancery recently decided the deal price was a reliable indicator of fair value and a downward adjustment for synergies was justified.
Valuation underpinning contested stock sale reflects fair value, Court of Chancery says
In a breach of fiduciary duty action arising out of a controversial stock sale, the Delaware Court of Chancery dismissed the plaintiff’s attacks on the underlying valuation, noting the appraiser was “exceptionally knowledgeable about the industry” and held “informed beliefs” as to the company’s specific structure.
Two valuable free video resources available for BVWire—UK readers
Michael Badham, executive director of the International Institute for Business Valuation (iiBV) alerted BVWire—UK that their panel discussion on valuing financial instruments has become their single most popular program, reaching 10,000 views last week.
Exposure draft on valuing inventory open for comments through 30 April
The IVS 230 Inventories Exposure Draft was issued last week and is now in consultation for two months until 30 April.
BVU News and Trends February 2020
A monthly roundup of key developments of interest to business valuation experts.
Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLP
Court rejects plaintiff’s damages calculation related to sweeping fraud and contract breach allegations where plaintiff submitted expert report before court’s liability rulings and failed to offer revised expert report after liability trial; damages were not sufficiently tied to proven wrongs.
Plaintiff’s Overbroad Damages Calculation Prompts Court Not to Grant Award for Proven Wrongdoing
Court rejects plaintiff’s damages calculation related to sweeping fraud and contract breach allegations where plaintiff submitted expert report before court’s liability rulings and failed to offer revised expert report after liability trial; damages were not sufficiently tied to proven wrongs.
Explanations of all new FASB guidance in one spot
A convenient tool for understanding all of the new financial reporting standards from the FASB is available on the organization’s own website, points out an article in the Tennessee CPA Journal (January/February 2020).
Agenda posted for ASA/USC fair value conference in Los Angeles June 20
An excellent lineup of speakers and topics has been announced for the 15th Annual ASA/USC Fair Value Conference on Thursday, June 18, at the offices of KPMG in downtown Los Angeles.
Valuing Customer Relationships: The Do's and Don'ts of the Distributor Method
While the relief from royalty method and multiperiod excess earnings method are effective tools for valuing intangible assets such as customer relationships, they rely on market data that can be both highly subjective and of poor comparable value to the subject company. As an alternative, the distributor method provides appraisers with a market-based proxy for use in valuing customer relationships. Join experts Edward Hamilton and Sean Woodward to explore the strengths and weaknesses of customer ...