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Showing 305–320 of 354 results

  • Guidance issued on valuation of partial interests

    May / June 2010
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 524

    Abstract: After a six-year development period, the American Society of Appraisers (ASA) recently added a new procedural guideline to its Business Valuation Standards: PG-2 — Valuation of Partial Ownership Interests. Although not a binding standard, PG-2 offers valuable guidance to ASA members and other business valuators on this difficult and often controversial subject. This article looks at some of the highlights.

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  • Lucent sheds light on patent infringement damages

    May / June 2010
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 497

    Abstract: Courts are generally loath to disturb a jury’s verdict on damages. But an appeals court threw out a $350 million patent infringement award that wasn’t supported by substantial evidence. This case illustrates the need for detailed expert testimony, which will establish credible evidentiary facts and conclusions and, thus, support a claim for patent infringement damages.

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  • What’s behind the veil? — Digging for the truth in alter-ego cases

    May / June 2010
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 740

    Abstract: When a plaintiff can’t collect a judgment from a corporation and seeks to obtain it from the corporation’s owners, it may try to show that the corporation and its shareholders lack separate identities — that is, the corporation is the owners’ alter ego. Key factors in determining an alter-ego relationship include not only this lack of separateness, but also financial dependence of the corporation upon its shareholders or parent, and undue influence upon a corporation.

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  • Struggling economy presents business valuation challenges

    May / June 2010
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 1046

    Abstract: In bad times, appraisers may face a disconnect between the income and market approaches, creating a wide gap between valuations. The challenge becomes reconciling these differences. This article explains how to approach valuation for both profitable and distressed companies, and notes that the purpose of a business valuation can have a big impact on the valuation methods that are used. A sidebar looks at one case in which a court rejected the uses of the discounted cash flow method by both the creditors’ and the debtors’ experts.

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  • Tiered valuation discounts: How low can you go?

    March / April 2010
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 353

    Abstract: Valuation discounts can substantially lower the fair market value of gifted business interests. But business interest owners often inquire as to whether additional discounts apply when multiple layers of ownership exist. The answer is, maybe — if each entity exists for a bona fide business purpose. This brief article uses a landmark case, Astleford v. Commissioner, to examine the ramifications of tiered valuation discounts.

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  • Fine-tuning the value estimate — The importance of valuation adjustments

    March / April 2010
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 736

    Abstract: An appraiser often makes adjustments to normalize companies’ earnings, removing all unusual, nonrecurring events from a company’s financial statements to reveal a clearer picture of the company’s normal operations. But what is normal? It depends. This article looks at the various adjustments an appraiser might make to achieve the appropriate basis of value.

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  • Rules of thumb are no substitute for the real

    March / April 2010
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 791

    Abstract: Rules of thumb are simplified formulas that may be published in trade journals or passed along by word of mouth. These equations vary from industry to industry, and their simplicity can be appealing to business owners. But it is that very simplicity that can cause problems. This article looks at the potential pitfalls of using rules of thumb to determine the value of a business interest.

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  • Economic bust, litigation boom

    March / April 2010
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 902

    Abstract: The sluggish economy might not be the only scapegoat for lackluster business performance. Civil wrongdoings, such as breach of contract or negligence, also cause companies to lose money. This article explains how a financial expert uses the evidence to determine the appropriate damages theory to account for loss in a damages case. The article mentions several factors the expert considers, including financial projections, comparable data, and damages duration. It also lists several accepted methods for quantifying economic damages.

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  • Creating a reliable buy-sell agreement — A valuation provision must be at its heart

    January / February 2010
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 1074

    Abstract: A buy-sell agreement can be an important tool in smoothing any business ownership transition — whether the aim is to maintain control, provide liquidity and a ready market for the stock, retain key employees, or ensure an orderly ownership transfer in the case of death, disability or divorce. And at the heart of every successful buy-sell agreement is a well-reasoned, supportable value. This article explains the various approaches a valuator might use to set the price in a buy-sell agreement and ensure the resulting valuation is objective and fair to all shareholders.

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  • Think outside the box in divorce

    January / February 2010
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 651

    Abstract: The rules governing equitable marital dissolutions vary from state to state. But divorce courts often consider cases in other jurisdictions, especially when relevant legal precedent in their own jurisdictions is lacking. This article uses a recent tax case, Wechsler v. Wechsler, to illustrate the importance of considering Tax Court precedent if a marital estate includes a holding corporation with significant built-in capital gains tax obligations. Citations: Wechsler v. Wechsler, 2008 WL 4635832, Oct. 21, 2008; Estate of Dunn v. Commissioner, 301 F.3d. 339, 5th Cir., 2002; Estate of Jelke v. Commissioner, U.S. Court of Appeals for the 11th Circuit, No. 05 15549, Nov. 15, 2007.

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  • Look for the silver lining — A volatile market translates into higher marketability discounts

    January / February 2010
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 1112

    Abstract: Recent market volatility may provide an opportunity to gift private business interests at significant discounts, potentially saving a substantial amount in taxes. High volatility typically lowers marketability by making investments less attractive. This article discusses the data valuators generally use to support marketability discounts for private companies, including restricted stock and pre-initial public offering studies. It also looks at other factors that affect marketability, such as the pool of potential buyers, company size and financial performance.

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  • SBA tightens business acquisition lending requirements

    November / December 2009
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 516

    Abstract: This brief article summarizes a recent SBA move to rein in lenient lending practices to small businesses: SBA Standard Operating Procedure (SOP) 50 10 5(A). The new requirement calls on business acquisition loan applicants to submit an independent business appraisal for all loans greater than $250,000 (excluding the appraised value of real estate and equipment). The article explains that the SBA defines a “qualified source” for the independent appraisal as someone who regularly receives compensation for business valuation. It also notes the controversy resulting from restrictions the SBA has placed on loans based on a company’s goodwill.

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  • One price doesn’t fit all — Making sense of valuation discounts

    November / December 2009
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 847

    Abstract: Valuation is based on the specific facts and circumstances of a situation. If the controlling interest and all the minority interests are valued separately, they may add up to more or less than what could be received if the company were sold as a whole. This article discusses the types of valuation discounts that may affect value, including minority interest and lack of marketability discounts. It explains the importance of the degree of control represented by a block of stock and uses a hypothetical case study to illustrate the way discounts actually work in the real world. The article points out that a qualified appraiser can find well-supported discounts that will withstand IRS scrutiny.

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  • Knowing value is half the battle

    November / December 2009
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 721

    Abstract: While baby boomers nationwide are considering selling their businesses in preparation for retirement, a majority of them haven’t had their businesses appraised by a valuation professional within the last year. This article looks at a business’s value drivers — and value drainers — listing several key factors investors look for when valuing a business interest, including profits and cash flow, competent asset management and reinvestment in research and development. The article explains that an objective valuator can help business owners find ways to minimize risks and maximize selling price when it’s time to retire.

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  • Built-in capital gains tax can be a real drag

    November / December 2009
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 851

    Abstract: Capital gains tax obligations can significantly affect value, especially for an established holding company with low cost basis. Even if a sale isn’t imminent, investors consider tax obligations when buying and selling business interests. This article notes that courts increasingly embrace valuation discounts for built-in capital gains tax, using a case study to illustrate the point that it’s not so much whether capital gains tax affects value but how to quantify the discount. Because the IRS and the Tax Court haven’t agreed on the proper method for quantifying the discount, it’s even more important that the discount be well supported by facts and legal precedent.

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  • Finding the appropriate valuation standard

    September / October 2009
    Newsletter: Viewpoint on Value

    Price: $225.00, Subscriber Price: $157.50

    Word count: 916

    Abstract: Valuation isn’t static and can change depending on the purpose of the valuation. This article looks at the three most common standards of value: fair market, investment and fair. It briefly defines each standard and discusses the circumstances in which one standard may be more appropriate than another. The article points out that identifying the appropriate valuation standard up front can minimize confusion down the road. The goal is to arrive at a reasonable and supportable value conclusion in light of all the surrounding facts and circumstances.

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