• QuickRead Top Story - Valuation/Appraisal

    How Does Your Business Grow? The Importance of Growth Assumptions in Delaware Appraisal Rulings

    April 23, 2025

    An important input to many valuations for disputes in the Delaware Court of Chancery is a business’s terminal value; the future value of a business that reflects all the cash flows expected to occur after the period for which management or analysts typically prepare cash flow projections. In this Q&A, the article’s authors explain how the assumptions underlying such calculations affect the valuation results when employing different valuation methodologies. In valuation disputes, adjudicators critically examine the methods and assumptions used by opposing experts when estimating a business’s future value. An important input to many valuations for disputes in the Delaware…

  • QuickRead Top Story - Valuation/Appraisal

    HVAC Business Valuation Considerations: Beyond Heating and Cooling

    April 16, 2025

    From coast to coast and everywhere in between, HVAC plays a critical role in economic performance and presents compelling opportunities. This article discusses factors business valuators must consider when they are engaged to value HVAC companies. Heating, ventilation, and air conditioning (HVAC) services are not only essential, they are foundational to modern comfort and thriving businesses. The history of HVAC is rich with innovation, and so is the craft of valuing HVAC companies. From coast to coast and everywhere in between, HVAC plays a critical role in economic performance and presents compelling opportunities whether you are launching a startup, expanding…

  • Litigation Consulting - QuickRead Top Story - Valuation/Appraisal

    Understanding the Income Approach: Forecasting Errors

    April 9, 2025

    One of the common pitfalls in applying the income approach is committing forecasting errors. To understand the impact of this error, this article discusses the importance of the income approach in business valuations and areas that require careful evaluation. One of the common pitfalls in applying the income approach is committing forecasting errors. To understand the impact of this error, let us first discuss the importance of the income approach in business valuations. Unlike the asset-based approaches, which primarily focus on the value of a company’s tangible assets, the income approach considers the earning potential of the business. This is…

  • QuickRead Top Story - Valuation/Appraisal

    Seize the Opportunity: Strategic Gifting Before 2026

    April 2, 2025

    The Tax Cuts and Jobs Act of 2017 presented an opportunity by significantly raising lifetime gift and estate tax exclusions, but this window is closing soon. With the exclusions set to expire at the end of 2025, there is an urgency to plan your gifts sooner than later. Imagine it is December 2025, and you have a chance to gift $14 million to your children without incurring a single dollar in federal gift tax. Fast forward just one day to January 1, 2026, and that same gift could trigger a whopping $2.8 million in taxes. This is not just a…

  • Litigation Consulting - QuickRead Top Story - Valuation/Appraisal

    Unimpeachably Neutral Professional Judgment: Is AI the Death of Professional Judgment or its Reincarnation

    March 19, 2025

    Only with careful oversight and the application of seasoned professional judgment can AI deliver results that are not only accurate but also defensible and unimpeachably neutral. This article in the Unimpeachable Neutrality Series explores the indispensable role of professional judgment, particularly as it intertwines with the capabilities of AI. The advent of artificial intelligence (AI) has brought a seismic shift to the field of valuation and forensic accounting. Data that once required weeks of meticulous analysis can now be processed in mere minutes. While AI’s outputs relative to financial modelling can be impressive, their reliability hinges on the neutrality and…

  • QuickRead Top Story - Valuation/Appraisal

    Can Brands Be Valued Using Relief from Royalty Method Only? Guidance from AICPA’s 2024 Accounting and Valuation Guide—Business Combinations

    March 12, 2025

    There are various methods used to value intangible assets. The relief from royalty method is based on the premise that there are royalty savings if the acquiror acquires the asset instead of licensing it. The value of the asset is calculated as the present value of after-tax royalty savings over the economic life of the asset. This article delves into the available methods used to value brands. When a company acquires another company, the acquiror may need to perform a purchase price allocation. In essence, the purchase price allocation (PPA) analysis apportions the purchase price to various tangible and intangible…

  • QuickRead Top Story - Valuation/Appraisal

    Understanding the Biden Administration’s NPRM on “Adequate Consideration” and the Trump Administration’s Freeze

    March 12, 2025

    This article is the latest installment of QuickRead articles on ESOP regulations. Specifically, it focuses on the request, and status thereof, for the Department of Labor to clarify “adequate consideration” for the valuation of entities held in ESOPs. This article is the latest installment of QuickRead articles on ESOP regulations.[1] Specifically, it focuses on the request, and status thereof, for the Department of Labor (DOL) to clarify “adequate consideration” for the valuation of entities held in employee stock option plans (ESOP). On January 20, 2025, President Trump issued an Executive Order freezing all former President Biden’s proposals that had not…

  • QuickRead Top Story - Valuation/Appraisal

    Business Valuation in Shareholder Disputes: Addressing the Value and Professional Standards Issues in the Engagement

    March 5, 2025

    Resolving a shareholder dispute often requires determining the value of a shareholder’s interest in the business. This article provides a framework for the business valuation expert to discuss this issue with attorneys and clients. Headings organize the questions and issues. Resolving a shareholder dispute often requires determining the value of a shareholder’s interest in the business. This article provides a framework for the business valuation expert to discuss this issue with attorneys and clients. Headings organize the questions and issues. Is the Juice Worth the Squeeze? This is the main question the attorney is asking us on the first phone…

  • QuickRead Top Story - Valuation/Appraisal

    Valuing Daycare and Early Learning Centers: Common Practices in Florida, Value Enhancement Strategies, and Market Positioning

    February 26, 2025

    How are day care and early learning centers valued? In this article, the author shares her thoughts on how these are valued in Florida. In addition, the author shares strategies to enhance the value of the business. “If children are the world’s greatest investment, then daycares are the blue-chip stocks of our future—steady, essential, and always in demand.” Valuing daycares and early learning centers is a dynamic and compelling area driven by multiple factors that influence their market value. Across the country, families face limited access to childcare, making daycare centers an attractive investment opportunity for both buyers and business…

  • Litigation Consulting - QuickRead Top Story - Valuation/Appraisal

    You Want the Valuation Experts to Reconcile: Are You Prepared for the Outcome?

    February 19, 2025

    What can parties in a litigation case do when the experts come to differing opinions of value? The authors share ways that parties and counsel can reconcile the differences or at least reduce the value gap. It sounds great—if the valuation experts can resolve their differences, a trial might be avoided, saving time and money. This strategy is not without peril, and clients may even find themselves unexpectedly bound by an agreement or terms they did not expect. This article covers what ensues when opposing legal counsels agree for the experts to meet, including how to manage the expectations and…

  • Forensic Accounting - QuickRead Top Story - Valuation/Appraisal

    Detecting AI-Generated Content: How Forensic Accountants and Business Valuation Professionals Can Give AI a “Run for its Money”

    January 22, 2025

    As AI proliferates, business valuation and forensic accountants will need to distinguish between human-authored and AI assisted/generated content. Significantly, AI generated content, as of the date of writing, is not accurate. In this article, the author examines what the above will mean to forensic accountants and business valuation analysts. With the rise of content generated by artificial intelligence (AI), it makes sense that there would also be an increase in online tools that can detect AI-generated content. What does this mean for professionals in the forensic accounting and business valuation fields? As AI writing tools like ChatGPT gain popularity, distinguishing…

  • QuickRead Top Story - Valuation/Appraisal

    Risks and Rewards: A Guide to Understanding Social Media Influenced Income for Valuation Professionals

    January 22, 2025

    While the influencer industry has created numerous opportunities for creators and brands alike, it also presents significant risks. This article aims to explore the challenges faced in this industry and offer insights into how to examine and assess these risks when performing a valuation analysis or assisting with litigation matters involving someone in the influencer industry. The rise of social media has transformed the landscape of marketing and personal branding, leading the way for a new breed of entrepreneurs known as influencers. These individuals leverage their online presence to engage with audiences, promote products, and shape consumer behavior across various…

  • QuickRead Top Story - Valuation/Appraisal

    Adequate Consideration Status Update, Part II

    January 8, 2025

    For purposes of valuing an ESOP, the question of what is “adequate consideration” has vexed the author and other BV practitioners. In this article, the author shares an update on the DOL’s response to earlier inquiries. Her two previous articles published in QuickRead detailed the earlier efforts to clarify what constituted “adequate consideration” for the valuation of entities held in ESOPs. On October 25, 2024, the OMB received a proposal on the topic from the DOL intended to clarify how shares in ESOPs are valued via adequate consideration. To date, I have written two QuickRead articles (“Adequate Consideration” Defined? and…

  • QuickRead Top Story - Valuation/Appraisal

    Meet IBISWorld’s New AI Tool “Phil” A New Method of Doing Research

    January 8, 2025

    The introduction of AI tools has empowered companies to streamline complex tasks, enhance accuracy, and offer real-time insights. One such company, IBISWorld, a leader in industry research, has taken a significant step forward with the introduction of its AI tool, “Phil.” This article explores the impact it will have on professionals working in business valuation, forensic accounting, and business consulting fields. As artificial intelligence (AI) continues to transform industries, market research is one of the fields most poised to benefit from these advancements. The introduction of AI tools has empowered companies to streamline complex tasks, enhance accuracy, and offer real-time…

  • QuickRead Top Story - Valuation/Appraisal

    Valuation Lessons from Connelly v. United States

    December 31, 2024

    The Role of Life Insurance in Estate Taxes The recent U.S. Supreme Court case, United States v. Connelly, provides business valuation practitioners opportunities to a cautionary tale and also an opportunity to assist business owners structure or restructure their buy-sell agreements. The authors summarize the case and offer tips to assist business owners transition a business using life insurance. Introduction Does the fair market value standard require the insurance proceeds owed to a company at the date of a shareholder’s death need to be added to the value of the business for tax purposes? The Supreme Court ruled that, yes,…

  • QuickRead Top Story - Valuation/Appraisal

    Act Now Before It’s Too Late

    December 4, 2024

    Valuation Discounts Considered in Gift and Estate Planning With a look forward to December 31, 2025, when the current lifetime exclusion levels for estate taxes are slated to sunset, wealth planners and their clients have much to discuss. Valuation and estate planning professionals have a key opportunity to strategize and develop the best plans for family businesses and high-net-worth individuals. With a look forward to December 31, 2025, when the current lifetime exclusion levels for estate taxes are slated to sunset, wealth planners and their clients have much to discuss. They have a key opportunity to strategize and develop the…

  • QuickRead Top Story - Valuation/Appraisal

    A Valuation Primer for Renewables (Part II)

    November 20, 2024

    Under Complex Considerations In Part I of this series, the article presented the fundamental standards used to gain a basis of understanding renewables and valuation drivers. These were presented in the context of an appraisal of wind rights and what would be included, as an example, in a valuation engagement. This second article focuses on the diminution of land values resulting from collateral damage from wind turbines and solar siting and placement impacting highest and best use of the subject property. In Part I of this series, the article presented the fundamental standards used to gain a basis of understanding…

  • QuickRead Top Story - Valuation/Appraisal

    Enterprise Value vs. Market Value of Invested Capital

    November 13, 2024

    In Small Business Valuations In a recent joint business valuation review engagement, the author and a fellow appraiser discussed whether one should use market value of invested capital (MVIC) or enterprise value (EV) when applying an income approach in business valuation. In this article, the author discusses these two concepts and sheds some light on why one might use one over the other. A recent joint business valuation review engagement sparked hours-long discussion between myself and a fellow appraiser about whether we should use market value of invested capital (MVIC) or enterprise value (EV) when applying an income approach in…

  • QuickRead Top Story - Valuation/Appraisal

    Business Valuations Used in ESOPs

    October 23, 2024

    Federal Rules and Regulations Governing ESOPs Business valuation reports of employer’s securities owned by ESOPs are subject to review by plan fiduciaries, government agencies, and IQPAs auditing the ESOP’s financial statements. Each of these readers have their own responsibilities to the participants and beneficiaries of the plans. This article will examine the federal rules and regulations governing ESOPS, the responsibilities of the report readers, and the use of the report as audit evidence. Introduction Business valuation reports of employer’s securities owned by Employee Stock Ownership Plans (ESOP) are subject to review by plan fiduciaries, government agencies, and independent qualified public…

  • QuickRead Top Story - Valuation/Appraisal

    A Valuation Primer for Renewables

    October 14, 2024

    Techniques Used in a Wind Power Valuation Engagement This article is aimed at valuing renewable interests or rights which is straight forward requiring basic application of valuation techniques. Appraisals that consider diminution of land estate values, damage assessments, complex end of life considerations, repowering analysis require more specific analysis and build up methods to establish defensible valuations. This article, part of a two-part series that focuses on renewable energy valuations, is written to provide a foundation for the novice appraiser who wishes to better understand renewable assets and the specific components that comprise a valuation. The forthcoming article will provide…