Viewpoint on Value
Showing 273–288 of 382 results
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Capital gains tax: To discount or not to discount?
September / October 2012
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 716
Abstract: Courts often struggle with how to interpret statutory fair value in shareholder disputes, including whether to discount business interests for built-in capital gains tax. This article uses a recent oppressed shareholder case, Dawkins v. Hickman Family Corporation, to demonstrate how courts may be persuaded by thorough, credible expert appraisal evidence. In Dawkins, a dollar-for-dollar reduction for capital gains tax was permitted in a shareholder dispute. Citations: Dawkins v. Hickman Family Corporation, 2011 WL 2436537, N.D. Miss., June 13, 2011. Estate of Dunn v. Commissioner, 301 F.3d 351, 5th Cir., 2002.
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Devil in the details — Creative ways to structure mergers and acquisitions
September / October 2012
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 905
Abstract: A business valuator can help the seller of a business understand what the business is worth and discuss different ways to structure a deal, depending on the owner’s priorities and aversion to risk. This article explains the ins and outs of determining a reasonable asking price and talks about the different types of value that may apply, including strategic value and fair market value. The article shows how valuators can help buyers and sellers negotiate mutually advantageous terms.
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Can public stocks be used to value private firms?
July / August 2008
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 1090
Abstract: Public and private businesses often differ significantly in terms of access to capital, product breadth and market reach. Still, many valuation professionals, along with the IRS and some courts, believe that the guideline public company method can work — under the right circumstances. But it takes an experienced valuator to know when and how to apply this method. This article explains the benefits and pitfalls of using the method and how to determine when it’s appropriate. (Updated 7/31/12)
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On your mark, get ready, sell
May / June 2008
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 1059
Abstract: The biggest financial transaction in a private business owner’s life is likely the sale of his or her business. Although many sales are premeditated, others result from unplanned events, which is why it’s essential for owners to have an exit strategy. This article explains how valuators can help entrepreneurs plan their exit strategies, whether sale is imminent, unexpected or a long-term goal. (Updated 7/31/12)
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Fraud affects business valuations, too
July / August 2012
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 371
Abstract: Occupational fraud occurs when someone uses his or her job for personal enrichment through the deliberate misuse or misapplication of an employer’s resources or assets. Such activity can skew financial results and lead to erroneous value conclusions — unless a valuator adjusts the financial statements for fraud. Appraisers don’t audit for fraud in the course of a typical business valuation assignment, but this short article explains that companies can still include them in their overall efforts to prevent fraud.
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Discount rates vs. capitalization rates
July / August 2012
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 590
Abstract: Some clients mistakenly use the terms “discount rate” and “capitalization rate” (cap rate) interchangeably. But they are two different concepts. It’s important to understand how these terms differ to prevent erroneous conclusions and courtroom blunders. This article discusses both types of rates and gives an example of how each works.
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Virtual reality — Determining the value of intellectual property
July / August 2012
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 817
Abstract: In an ever more virtual world, business owners increasingly depend on intellectual property (IP) to generate value for their companies. But determining the value of IP can be challenging. In addition to obtaining guidance from professional appraisal organizations, appraisers use several methods to determine what these intangible assets are really worth. This article explains the methods they use in valuing IP and the approaches they take to value patents, copyrights and trademarks.
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Winning the DLOM debate — Use an appraiser to support marketability discounts
July / August 2012
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 971
Abstract: The discount for lack of marketability (DLOM) attempts to capture the various attributes associated with selling a private interest. But a taxpayer and the IRS may disagree on what constitutes a reasonable DLOM for a particular set of facts and circumstances. This article describes how valuation professionals analyze empirical data to quantify a reasonable DLOM for each subject company based on its specific attributes. A sidebar discusses whether it’s possible to take a DLOM on a controlling interest.
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Expert witnesses — Surviving Daubert challenges
March / April 2008
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 881
Abstract: If disputing parties can’t settle their differences, valuators can act as expert witnesses. But increasingly courts hold expert witnesses to a higher standard, considering, among other things, the expert’s education, experience and credentials. This article reviews the history of admissibility of expert witnesses, focusing on the four-pronged test the Supreme Court set up in Daubert v. Merrell Dow Pharmaceuticals Inc. to determine the validity of an expert’s methodology. It lists several problems that could lead to exclusion during a Daubert challenge, including mathematical errors and failure to conduct due diligence. (Updated 5/31/12)
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Goodwill hunting in divorce
March / April 2008
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 1093
Abstract: In divorce cases, goodwill is both difficult to define and often understated. Parties — and experts — seldom agree on the value of the business in a marital dissolution situation, especially when substantial intangible assets are involved. Also, state statutes may be ambiguous, legal precedent is inconsistent and courts may be granted significant leeway in divvying up business assets. This article examines a hypothetical divorce case and finds that attorneys and valuators need to understand applicable state statutes and case law. (Updated 5/31/12)
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The critical difference between valuations and calculations
May / June 2012
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 309
Abstract: This brief article delineates the differences between valuations, which require a full range of appraisal procedures and approaches, and calculations, which are less comprehensive and more limited in scope. It’s important for potential users of appraisal reports to understand these distinctions in order to determine which type of report is most appropriate for their needs.
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Back to the future — Create a viable buy-sell agreement now
May / June 2012
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 856
Abstract: A business owner needs a buy-sell agreement to provide liquidity and an orderly transition in the face of unexpected change. This article discusses the importance of ensuring the agreement is properly thought out. Failing to clearly define how value is to be determined, and how often, can lead to disputes that may undo the benefit of having a buy-sell agreement in the first place. The article explains that employing experienced valuation professionals can help avoid these problems and help address share price and funding issues.
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Will your FLP be DOA? — Estate of Liljestrand provides some clues
May / June 2012
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 729
Abstract: The recent Tax Court case Estate of Liljestrand reads as a case study of what not to do with a family limited partnership (FLP). This article discusses the decision and points out some important lessons that can be gleaned from it, including the fact that attention to FLP formalities, retaining some personal assets outside the partnership, and obtaining a formal outside appraisal are key to withstanding IRS scrutiny. Case citation: Estate of Liljestrand, T.C. Memo 2011-259, November 2, 2011.
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When selling isn’t an option — Alternative strategies to recoup your investment
May / June 2012
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 838
Abstract: Some business owners expect to sell their companies when they retire. But in the current business climate, owners can’t rely on getting top dollar for their investment. This article notes that business owners may benefit from considering alternative exit strategies such as joint ventures, management buyouts, or employee stock option (ESOP) plans. The article looks at some creative exit strategies to enable business owners to avoid selling their business interests for less than a fair price.
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Capitalizing vs. discounting — Which appraisal method is appropriate, when?
January / February 2008
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 1057
Abstract: Under the income valuation method, value is a function of a company’s expected economic benefits and its risk relative to other investment types. The two most common income approaches are capitalization of earnings and discounted future earnings. This article discusses the distinctions of and differences between the two as well as the possible complexities that may arise in the use of the income approach (Updated 2/29/12)
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Third time’s a charm — An additional opinion can help resolve disputes
January / February 2008
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 971
Abstract: Even two unbiased, equally qualified valuation professionals applying sound appraisal practices are unlikely to arrive at exactly the same number. In fact, valuation differences of 10% or more are common — even under ideal circumstances. In litigation, when neither valuator will concede an objective third expert can help settle the dispute. This article discusses third expert selection and uses a hypothetical case to illustrate the important role a third expert can play. (Updated 2/29/12)