Bohac v. Benes Serv. Co.
The Nebraska District Court in this case applied discounts to its determination of fair value (FV). The Supreme Court found that the district court did not use the correct definition of fair value, resulting in discounts being applied to the estate’s shares. The Supreme Court also found that the proper premise of value was going concern and the proper methodology for value was the asset approach. The Supreme Court also allowed as a liability the deferred tax on potential future sale of assets by the corporation.
The Nebraska District Court Is Reversed in Its Determination of Fair Value
The Nebraska District Court in this case applied discounts to its determination of fair value (FV). The Supreme Court found that the district court did not use the correct definition of fair value, resulting in discounts being applied to the estate’s shares. The Supreme Court also found that the proper premise of value was going concern and the proper methodology for value was the asset approach. The Supreme Court also allowed as a liability the deferred tax on potential future sale of assets by the corporation.
Damodaran on the CEO mismatch
Assessing management is a key part of the valuation analysis of a subject company.
BV luminaries celebrate Festivus
What are the bugaboos of leading BV practitioners? For Roger Grabowski (Duff & Phelps/Kroll), it’s errors he sees in estimating long-term growth rates—he contends that analysts should not be using long-term real GDP growth plus expected inflation.
What’s your BV beef? Join the BV Festivus tomorrow, December 9!
In the final episode of BVR’s Power Panel for 2021, a lineup of legendary experts will have a Festivus-themed conversation—with a BV twist.
Appeals Court Decides Trial Court Abused Its Discretion in Choosing the Method of Determining Damages
In this case alleging damages to a soybean crop, a Louisiana court of appeals determined that the trial court abused its discretion when it chose an expert's methodology for calculating damages, as another methodology was supported by the record and was not overly speculative; a reduced damage award was appropriate. The trial court affirmed two other issues regarding evidence of cause of damages and the issue of standing as to who owned the land and thus the crops.
Dettenhaim Farms, Inc. v. Greenpoint Ag, LLC
In this case alleging damages to a soybean crop, a Louisiana court of appeals determined that the trial court abused its discretion when it chose an expert's methodology for calculating damages, as another methodology was supported by the record and was not overly speculative; a reduced damage award was appropriate. The trial court affirmed two other issues regarding evidence of cause of damages and the issue of standing as to who owned the land and thus the crops.
Attrition Analysis, Midperiod Convention and Customer Retirement Forecasts
Attrition analysis is widely used by valuation professionals as a recognized method to forecast customer population retirement behavior. With attrition analysis, an expected customer population retirement profile is developed through the study of historical customer retirement activity and applied to the customer population when valuing customer relationship intangible assets. As a frequent reviewer of customer relationship valuations, valuation practitioners regularly develop an attrition analysis founded on a midperiod retirement convention but then apply an end ...
A Current View of the Restricted Stock Studies and Restricted Stock Discounts
Although there is relevant evidence in some restricted stock studies that can be helpful for marketability discount determinations, comparisons with average discount observations from these studies do not provide a meaningful methodology to estimate marketability discounts. We conclude this despite the fact that too many valuation analysts continue to rely on simplistic comparisons with averages of restricted stock discounts from dated studies in their marketability discount determinations.
Understanding Business Valuation - 6th Edition
February 2022 Hardcover, PDF
Gary Trugman
Business Valuation Resources, LLC
Active and Passive Appreciation in Valuation: Finding the Line
Breaking up is hard, but harder still is appropriating the appreciation of the marital estate during the marriage. The most troubling issue with active and passive appreciation in divorce cases is applying a method based on sound theory, good empirical evidence, and a clear common-sense framework. Ashok Abbott demonstrates a methodology and supporting evidence to isolate passive appreciation successfully. By working through a practice-ready example, you’ll be sure to come away with a new appreciation ...
Relying on Guideline Public-Company Data in Appraisals of Closely Held Interests
What are the guidelines for using the guideline public-company data in appraisals of closely held interests? Join Rob Schlegel to learn the background and logic for appraisers relying on public-company transaction data, including the advantages and disadvantages. There are a variety of sources for these data, and several examples will be provided as to how these data are used. Winnowing the initial data group and concluding on the best fit given the client conditions imply ...
Monte Carlo 101: How to Set Up Your First Simulation
Join Oksana Westerbeke and Keith Konen to learn the basics of the Monte Carlo simulation. Review the pros and cons of different software used for Monte Carlo simulations. Then dive into the steps to set up your first Monte Carlo simulation with a detailed discussion of the “assumptions” and “forecast” of the Monte Carlo simulation, the analytics and output, and troubleshooting. Learn through the hands-on visual presentation of designing and implementing a Monte Carlo simulation ...
Embracing the Hockey Stick: Alternative Approaches to Formulating and Assessing Projections
The question of projections may be one of the most challenging elements of a business or intellectual property appraisal. Most business appraisers will be placed in a position of assessing projections, including projections another appraiser provided. Join Michael Blake for an exploration of the quantitative and empirical methodologies for creating and/or validating projections. As a result of this class, you will gain exposure to potentially new tools to help make your projections more robust and ...
Comparing Growth Rates Used in Discounted Cash Flow Valuations
Estimating growth in net cash flows is one of the key components in applying the discounted cash flow (DCF) method in valuing any company, reporting unit, or other business unit. This paper explains the underlying assumptions of the DCF method and demonstrates how to compare the most commonly used basis for estimating net cash flows (sometimes referred to as free cash flows), expected organic growth, to historic estimates of growth of the subject company and ...
Bitcoin & Digital Assets: The Industry, Valuation, and Forensics
Every day, bitcoin and digital assets seem to become more mainstream for both businesses and investors. Over time, valuation and forensic professionals are bound to encounter clients with digital asset holdings, and they will need to face the unique challenges they create. Experts Mark DiMichael and Jennifer Cohen will provide valuation and forensic accounting professionals with the information they need to help their clients deal with this complex asset class.
Evaluating and Applying Control Premiums
In recent years, a greater amount of scrutiny has been placed on valuation analysts’ selection and use of control premiums. As a result, there has been a renewed interest in distinguishing acquisition premiums from control premiums and equity premiums from invested capital premiums. Join Timothy Meinhart for a comprehensive discussion of the proper quantification and application of acquisition premiums and control premiums and also learn about the benefits of using market-based invested capital premiums rather ...
Power Panel: Live Expert Answers for Today's Tough BV Questions
What is going on next in BV? While we don’t have a crystal ball, we do have the next best thing. Thought leaders Jay Fishman, Neil Beaton, Ray Rath, and Stacy Collins on hand to answer your questions on what is changing, trends within the profession, and thought processes behind tackling tough problems. What’s more, if you send in a video of yourself asking the question, you will get free admission to the session. Use ...
Valuing Enterprise Cash Flows
The integrated theory of business valuation provides a conceptual framework for disciplined analysis of valuation questions. Too often, valuation analysts are tempted to view individual components of a valuation assignment on a piecemeal basis. Adhering to the integrated theory helps valuation analysts develop base valuation conclusions, discounts, and premiums that are rooted in a shared perspective of the subject company and the subject ownership interest. In Part 1 of the series, Chris Mercer and Travis ...
Valuing Small and Micro Businesses Using the Income Method
Focus in on valuing micro and small businesses using the income methods of business valuation. Learn to distinguish differing risk factors between large companies and micro and very small companies. Join Gregory Caruso for a deep dive into problematic areas of actual small-business valuation cases to review theory and tie it into the actual application of methods using best practices and professional judgment. Audience questions and succinct opinions welcomed in this hands-on event.
Business Valuation Year in Review 2020
What a year! This is a recap of developments in the business valuation profession under the shroud of COVID-19 including the latest thinking in methodologies, changes in regulations, new and updated resources, and practice-building ideas.
The Top Valuation and Damages Cases of 2020
Our pick of valuation-related court cases includes state and federal court decisions covering many areas of law that dealt with novel issues of law or, in some way, enhanced our understanding of valuation and damages issues as they arose in a litigation setting.
Navigation Through the Maze in Complex Debt Instruments Valuation
Global convertible security issuance has surged in the wake of the COVID-19 outbreak as companies rush to raise cash to see them through the economic impact. This has resulted in an increase in demand for fair valuation requirement for convertible instruments. However, determination of fair value of convertible instruments can be a challenging task. Multiple provisions and attributes of the underlying security need to be considered and modeled. Join Mark Zyla, Rajesh C. Khairajani, and ...
Power Panel: Live Expert Answers for Today’s Tough BV Questions
What is in store for 2021? While we don’t have a crystal ball, we do have the next best thing. Thought leaders Jay Fishman, Jeff Tarbell, Michelle Gallagher, and Ken Pia are on hand to answer your questions on what is changing, trends within the profession, and thought processes behind tackling tough problems. What’s more, if you send in a video of yourself asking the question, you will get free admission to the session. Use ...
Stark Differences from the Inside Out: Two Key Responders Discuss The Final Stark Regulations for FMV and Commercial Reasonableness
The Stark regulations have been updated. What has changed and how does it impact value? Mark Dietrich and Tim Smith were two major contributors of public comments to the Centers for Medicare & Medicaid (CMS) for the updated Stark regulations with over 100 pages of newly written material that was influential in the development of the final regulatory definitions for FMV and commercial reasonableness. In addition, they included over a dozen chapters from the BVR/AHLA ...