Viewpoint on Value
Showing 241–256 of 382 results
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Picking the “right” standard of value in divorce
November / December 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 412
Abstract: In divorce cases that include a private business, the attorney and client need to know how much the interest is worth to equitably distribute marital assets. But a universal standard of value that applies in all divorce cases doesn’t exist. This brief article discusses the most common standards of value in divorce — fair market value and fair value — and notes the differences between the two. The article also stresses the importance of engaging a valuator who is familiar with both relevant state divorce statutes and case law in the particular jurisdiction in order to minimize valuation-related complications.
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It’s only reasonable – 5 factors to help determine reasonable compensation
November / December 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 570
Abstract: The question of reasonable compensation is frequently debated in shareholder disputes, divorces and IRS inquiries. Owners’ compensation can vary significantly from company to company based on many factors, such as the owner’s education, licenses, training and salary history; the business’s size; and industry trends. This article explains five factors courts use to determine whether an owner-employee’s compensation is reasonable. Typically, a determination of reasonable compensation is objective, unbiased and based on relevant empirical data.
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DCF method is only as good as what lies beneath
November / December 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 659
Abstract: This article uses a 2012 case, In re Bachrach Clothing, to illustrate that the discounted cash flow (DCF) method is only as reliable as its underlying assumptions — and the objectivity of the experts performing the analyses. The article describes the background of this case and looks at the discrepancies between the two experts’ approaches. The experts both relied on the same cash flow projections and used the DCF method — but reached radically different conclusions. The article notes the importance of supporting valuation assumptions with objective, market-derived evidence to reach a well-reasoned valuation conclusion that can withstand court scrutiny. In re Bachrach Clothing (Bankruptcy No. 0655, Adversary No. 08-00726, U.S. Bankruptcy Court for the Northern Division, Oct. 10, 2013).
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Cross-examining a valuator: Where do I start?
November / December 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 902
Abstract: Effective cross-examination of a valuation expert takes patience, skill and planning. This article suggests several key questions that can help an attorney probe, and possibly cast doubt, on an opposing expert’s testimony. The article elaborates on areas that may shed light on the opposing expert’s areas of weakness, including his or her qualifications, objectivity, methods and approaches, adjustments, and discounts. The article points out that attorneys who take the time to gain a general understanding of valuation techniques and issues are more successful in cross-examination.
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Fair value – Court frowns on speculative adjustments
September / October 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 420
Abstract: A recent court case, In re: Appraisal of Orchard Enterprises Inc., highlights the importance of using well-supported, objective analysis throughout the appraisal process. This brief case study discusses the ins and outs of the case and notes that using methodologies supported by the latest academic research, minimizing the use of subjective data and avoiding speculative adjustments in determining business value are the best ways to withstand legal scrutiny.
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Hunting for buried treasure — or traps – Hidden assets and liabilities may affect value
September / October 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 638
Abstract: In answering the question of what a business is truly worth, an appraiser considers many aspects of its operations, from management, to products and services, to the health of its industry. He or she also looks beyond the balance sheet, seeking any hidden assets or liabilities that may affect value. An appraiser analyzes several areas, including uncollectible receivables, inventories and fixed assets, in determining the appropriate adjustments.
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Sorting the alphabet soup of valuation credentials
September / October 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 667
Abstract: Not every financial professional is qualified to value a business — especially if a third party will rely upon the appraisal. Earning a valuation credential requires specific coursework, testing, peer review and other prerequisites. This article helps business owners and attorneys sort through the various valuation credentials by summarizing the requirements of the most common business valuation designations.
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7 questions to gauge marketability
September / October 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 880
Abstract: Marketability is the ability to quickly convert a business interest into cash, with minimum costs and maximum certainty about the price it will fetch. The higher the costs and the lower the certainty, the less the interest is worth. A discount for lack of marketability (DLOM) gauges the relative ease of selling a business interest in the marketplace. This article lists seven questions covering the various factors an appraiser takes into account when quantifying a DLOM.
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Help! When to call an appraiser
July / August 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 297
Abstract: Attorneys may wonder when during the litigation process to contact an expert witness. Some may even hope to achieve an out-of-court settlement without calling in outside expertise. But delaying an appraisal may prove more costly in the long run. Most valuators agree that it’s never too early to contact them if there’s a chance litigants will disagree about the value of a business interest. This brief article explains why contacting an appraiser early and often will benefit a case’s outcome.
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Guideline public company method: Pros and cons
July / August 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 600
Abstract: In determining the value of a private business, valuators often look at other companies, whether they are privately owned or public. This article discusses how the guideline public company method, a variation of the market approach, can be useful — as long as its drawbacks are understood. The article notes that, if used appropriately, the guideline public company method can provide valuable insight into the factors driving a particular industry’s market value.
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Why levels of value matter – Defining the appropriate basis is key
July / August 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 618
Abstract: A business may have more than one value, depending on the purpose of the appraisal and the characteristics of the ownership interest. Confusion over levels of value may lead to misinformed business decisions. This article lists some different levels of value, such as control, minority marketable value and minority nonmarketable value. The article points out the importance of discussing all the options and making an informed decision under the guidance of an experienced valuation professional.
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Too good to be true? Some courts are allowing multitiered valuation discounts
July / August 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 794
Abstract: The Tax Court has upheld the concept of tiered valuation discounts in several high-profile recent cases, including Astleford v. Commissioner and Gow v. Commissioner. This article outlines some key points a valuator considers when supporting valuation discounts in a multitiered entity. The article describes how tiered discounts work, using recent cases to illustrate. It then notes that, to qualify for a discount and withstand Tax Court scrutiny, each tier must be reasonable and well documented and have a bona fide business purpose. Astleford v. Commissioner (T.C. Memo 2008-128); Gow v. Commissioner (T.C. Memo 2000-93); Estate of O’Connell v. Commissioner, T.C. Memo 1978-191, aff’d on this point, rev’d on other issues 640 F.2d 249 (9th Cir.1981).
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Site tours: Why experts visit before they value
May / June 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 414
Abstract: Few people make a major purchase, such as a car or a home, without physically inspecting it first. Similarly, appraisers tour facilities and interview management before they draw value conclusions. This brief article points out that site visits and management interviews are integral parts of the valuation process and shouldn’t be overlooked. The article cites some recent cases that reinforce this point and lists some of the characteristics valuators consider on site visits. In re Marriage of Hanscam, 268 P.3d 715 (2011), 247 Or. App. 207, Dec. 14, 2011. Zeefe v. Zeefe, 125 Ohio App.3d 600,709 N.E. 2nd 208, 1998. Okerlund v. United States, Fed. Cl., No. 99-133T. 2002.
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Avoid roadblocks with a reliable buy-sell agreement
May / June 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 650
Abstract: Even the most successful businesses may run into roadblocks when struck by unexpected events, such as death, disability or divorce. A well-reasoned buy-sell agreement can help businesses maintain control and ensure orderly ownership transfers. This article discusses the ins and outs of buy-sell agreements, noting the importance of obtaining an independent appraisal and the need to define key terms such as the standard of value and the valuation date. All of these factors combine to generate a valuation that is objective, independent and fair.
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Go deep – Superficial overviews won’t pass muster in patent infringement cases
May / June 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 678
Abstract: Valuators are often hired to quantify patent infringement losses. This may involve estimating lost profits or determining reasonable royalties due to the inventor. But according to recent U.S. Federal Circuit court decisions, conclusions based solely on outdated rules of thumb or superficial overview of the Georgia-Pacific factors no longer pass muster. This article cites recent court decisions that shed light on the in-depth analysis now deemed necessary in determining patent infringement losses and royalty rate calculations. Uniloc USA Inc. v. Microsoft Corporation, 632 3d. 1292, 1315, Fed. Cir. Jan. 4, 2011. WhitServe LLC v. Computer Packages Inc., Case Nos. 2011-1206, 1261, Fed. Cir. Aug. 7, 2012. Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120, S.D. N.Y. 1970.
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A house divided – Shareholder disputes call for valuation expertise
May / June 2013
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 780
Abstract: When shareholders disagree — for example, when minority shareholders oppose a major corporate decision or a controlling owner is accused of wasting corporate assets — the owners may need an appraisal to equitably part ways. But before valuing a privately held minority interest, an appraiser has to address several issues, such as the appropriate standard of value, valuation discounts and adjustments, and the effective appraisal date. This article uses a hypothetical example to highlight these issues, showing how appraisers bring their experience and expertise to bear and help shareholders reach a fair settlement.