Global BVU News and Trends December 2024
Business valuation news from a global perspective.
Letter to the Editor: Feedback on Paper Concerning Company-Specific Risk
Comments on a recent research paper as it relates to total beta and the Butler Pinkerton Calculator.
Global: KPMG’s new cost of capital study examines the ‘new dilemma’
KPMG has published its “Cost of Capital Study 2024” with the theme: “The New Dilemma: Balancing Interest Rates and Growth,” which is the 19th edition of this study.
The Continuing Evolution of the BUM
The author provides some very interesting reflections and perspectives, drawn from over 40 years of experience, and brings us up to date on this long-lasting method.
Valuation Report Excerpts Using Pepperdine to Estimate a Discount Rate
Sample language adapted from actual valuation reports using information from Pepperdine’s “2024 Private Capital Markets Report” to estimate cost of capital for a small business, including an adjustment for company-specific risk.
BV News and Trends August 2024
A monthly roundup of key developments of interest to business valuation experts.
Global BVU News and Trends August 2024
Business valuation news from a global perspective.
Retain Professional Judgment in Your Cost of Equity Estimates
Amid the barrage of emerging technology, artificial intelligence, and automated valuation models, there is a concern in the profession about the “black box” phenomenon of using these tools. Dr. Michael Crain (Florida Atlantic University), the author of the Cost of Capital Professional platform, talks about this with Ron Seigneur (Seigneur Gustafson LLP) during a demo of the platform.
RESEARCH UPDATE: Monthly Recap of Research Papers July 2024
The featured paper is “Beyond Subjective Weights—Risk Aware Reporting of Valuation Results for a Privately Held Business” by Mikhail Munenzon (InteleK Business Valuation & Advisory). Other papers of interest to valuation experts cover topics including ERPs and risk-free rates, valuation of data assets, quantitative disclosures and risk, and the impact of founder-family succession on firm value.
BV News and Trends July 2024
A monthly roundup of key developments of interest to business valuation experts.
Global BVU News and Trends July 2024
Business valuation news from a global perspective.
What to Know From the ASA Fair Value Conference
Regardless of whether you practice in the area of fair value for financial reporting, there were some valuable insights offered at the ASA Fair Value Conference in New York City this past April. Many of the concepts and methodologies apply in other valuation contexts, so valuation analysts should keep up on developments in this area.
A Method for Forecasting Property Impairment Resulting From Climate Change
This article adds to the discussion of the impact of environmental, social, and governance (ESG) impacts on the valuation of businesses with real estate as an integral part of their operations.
Kroll lowers recommended ERP to 5.0%
Kroll has decreased its recommended U.S. equity risk premium (ERP) from 5.5% to 5.0% when developing USD-denominated discount rates as of June 5, 2024.
‘The Son-in-Law Also Rises’: Do founding family-run firms have less value?
Assume you’re valuing a family business that the son-in-law of the founder, who recently passed away, runs.
BVU Cost of Capital Center adds more Pepperdine info
Starting with the August issue of Business Valuation Update, information on rates used in practice for company-specific risk, industry risk premia, and the size premium will be included in the monthly Cost of Capital Center.
2024 Pepperdine report is now available
The 2024 edition of Pepperdine’s annual survey of expected rates of return with respect to private companies is now available (for free, thanks to continued financial support).
New feature in Business Valuation Update spotlights research
To promote more of a connection between valuation practice and financial research, BVR’s monthly Business Valuation Update now includes a recap of research and scholarly papers that should be of interest to valuation experts.
Private firms see inflation as the top risk
Over three-quarters (78%) of private companies see inflation as the most concerning business threat, according to the “Private Company Performance Report” from CitrinCooperman.
Preview of TAF guidance on the company-specific risk premium
In the last issue, we mentioned that auditors are looking for more quantification of the company-specific risk premium.
Auditors need to see more quantification of company-specific risk
One of the major audit review issues is company-specific risk (CSR), revealed a panel of Big Four leaders at the recent ASA Fair Value Conference in New York City last week.
Lingering high interest rates may trigger more goodwill impairments
Faced with elevated interest rates that show no signs of dropping, more companies will be forced to recognize goodwill impairments, according to a recent Wall Street Journal article.
What to know from the ASA Fair Value Conference
It was another great turnout for the ASA Fair Value Conference in New York City last week.
Reminder: Take the IVSC survey on ESG
To investigate the evolution of how environmental, social, and governance (ESG) factors are being incorporated into the valuation process, the International Valuation Standards Council has launched a survey.
BV News and Trends April 2024
A monthly roundup of key developments of interest to business valuation experts.