Depreciation is not a “paper” expense. It is very real. Fully depreciating capital assets distorts the income statement and balance sheet. The depreciation recorded for tax and financial reporting purposes also tends to distort the net asset value of the asset. Depreciation is not a “paper” expense. It is very real. ...

Appraising marina properties is a challenging niche with as many variables as there are bodies of water Just like appraisals on dry land, location plays a major role in developing an opinion of value for a marina property, but the criteria for an appraisal can be a little different from those of landlocked commercial enterprises. Here are a few of the questions that must be considered when valuing marina pr ...

Digital technology removes barriers and excuses In this second part of her five-part series, Simone Hoover provides an in-depth explanation of the technical language surrounding online cloud services, contractual conditions and the literal forces of nature that pushed her into the virtual office environment. ...

Digital technology removes barriers and excuses Most professional services organizations are already adopting some form of digital identity. It takes just a bit more to embrace the cloud and reap the benefits of becoming a virtual firm. ...

A frequently missed opportunity for appraisers This article provides an overview of some of the complex rules relating to the built-in gains tax. It is intended only to acquaint business valuators with the structure of the tax and some of the key considerations which the business valuator must address. ...

When are “subsequent events” knowable, and what about IRC Sec. 6662(g)(2) penalties? Trout Ranch, LLC v. Commissioner raises additional causes for concern, including subsequent events in appraisal documentation and failures to include them, which may create more valuation penalties on tax filings. ...

Diversify your practice and expand your skillset Valuation analysts can develop the necessary skillset to perform economic damages calculations and construct detailed reports. This is the case despite the differences in how economic damages calculations are prepared vis-à-vis commercial damages calculations. ...

Has the new federal tax regime set forth the grounds to reconsider an ESOP? An ESOP is a qualified retirement plan that can use debt financing to buy company stock from the company’s owner(s). It’s a serious option for any business owner who wants to liquidate some or all of his or her ownership. Martin Staubus reviews how ESOPs work, as well as the benefits they provide to buyers (employees) and sellers (o ...

The financial neutral plays an important role in the collaborative law process One of the team members in the collaborative law process of divorce is the financial neutral. This article explains the role of the financial neutral as an impartial expert. ...

Jumpstarting a career as a litigation consultant and expert witness Getting started as a litigation consultant or expert witness takes time. The service is cyclical, and the first engagement may be the last engagement. You’ll need to be well-prepared and knowledgeable in each field. ...

Will the valuation report prepared by the non-accredited CPA be admitted? The author was recently involved in an Oklahoma domestic relations case where the opposing expert contended he did not have to abide by AICPA valuation standards, reporting or otherwise, since he was not a member of the organization. This article summarizes how this issue was handled by the Oklahoma judge. ...

A proactive approach pays off for selling shareholders A business valuation analyst has the training, valuation skills, and experience to provide meaningful feedback to owners seeking to exit their businesses. When and how to conduct the pre-sale valuation is crucial to maximizing profit potential. This article will provide insight into using your valuation skills to help prepare a business for sale. ...

Suggested benchmark analysis to assess the reasonableness of the cost of equity In the February/March 2013 issue of the Financial Valuation & Litigation Expert (FVLE), Issue 41, Jim Hitchner authored “How to ‘Rig’ a Valuation: The Discount Rate.” This is the first of a two-part FVLE series. The article provides suggested guidance to unmask the intentional “rig.” ...

An ethical duty to ourselves, the profession, and our clients Business appraisers owe each other, the profession, and clients a duty to behave ethically and set aside our own biases and self-interest. ...

How much is that receivable really worth? Valuing receivables in a medical practice is never simply a matter of analyzing an aged receivables report. A number of factors must be considered to accurately value what could easily be the largest asset of the practice. ...

Book Review ...

Fractional interest discounts allowed In Estate of Elkins v. Commissioner, the U.S. Tax Court sides with petitioners holding they were entitled to a ten percent discount from pro rata fair market value with respect to a decedent’s interest in various works of art.  In Fancher v. Prudhome, the Louisiana Court of Appeals upholds a trial court’s determination that using the Income Approach to value a withdrawi ...

How to apply the landmark cases Delaware MRI (2007) and Bernier (2012) Eric J. Barr, CPA/ABV/CFF, CVA, CFE, analyzes two landmark court decisions—Delaware MRI and Bernier—and offers more clarity on the proper way to value an ownership interest in a pass-through entity under the fair market standard of value.  ...

Understanding EBITDA applications is crucial to accurate buyout values. This analysis examines EBIDTA as an overused metric that does not represent real economic profit.  According to the author, eight subtractions are required to consistently and accurately determine true profit values.   ...

Fraudsters Are SophisticatedThis article examines the technology associated with Wi-Fi, vulnerabilities to commit fraud and preventative measures that can be taken to avoid becoming a victim of fraud. ...