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The National Association of Certified Valuators and Analysts® (NACVA®) has been educating and credentialing CPAs and other financial advisors to support business owners in understanding the value of their business for the past quarter century. NACVA’s  global Certified Valuation Analyst® (CVA®) designation is the most widely recognized valuation credential and the only business valuation credential accredited by the National Commission for Certifying Agencies® (NCCA®).

Exploring the Pluris® Restricted Stock Database and DLOM Calculator

A White Paper Detailing Use of the Pluris Database to Develop a DLOM (Part I of III) Business valuation practitioners continue to debate the merits of different databases to develop a discount for lack of marketability (DLOM).  In this first- of a three-part series, Marc Vianello discusses what the Pluris DLOM database is, explores how accurately Pluris transactions are reported, and discusses how the Pluri ...

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Yes, Yet Another Article on the “Settlement” But With a Twist

Analysis of Unaudited Financial Statements—Who and How? There has been much discussion within the ESOP community about the “settlement” and its reverberations. As readers are likely aware, the settlement in question refers to the 2014 settlement agreement between GreatBanc Trust Company and the United States Department of Labor (DOL). The terms of the settlement include, among other things, an agreement con ...

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30 Ways to Structure a Transfer of a Business to a Successor

Ways 1 through 15 (Part I of II) This is the first of a two-part article, where Edward Mendlowitz shares fifteen of the thirty ways to structure a transfer of a business to a successor. Mendlowitz stresses that a succession plan is important and too often overlooked by business owner(s) involved in day-to-day operations. Capturing the value and having a strategy in place provides ongoing cash flow, a degree ...

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Impact of Inadequate Discovery

in a Divorce Proceeding Not all is fair in love and war when it comes to the fight for business records within a matrimonial action. When one spouse is denied adequate discovery, his or her case can quickly begin to unravel. Usually, some records are available either because the spouse had some previous access or there was a partial document production. Business appraisers should consider all appropriate me ...

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Top Highlights

NACVA’s Silver Anniversary Conference NACVA and the CTI’s 2016 Annual Consultants’ Conference held this past June in San Diego, CA was a spectacular assembly of presenters, attendees, exhibitors, candidates, and staff. This one pulled out all the stops, featuring prestigious keynote speakers, engaging training sessions, an assortment of networking opportunities, and many more events to enjoy. It proved to b ...

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Discounts for Lack of Marketability

Consideration for Closely Held Securities—DLOM Theoretical Models (Part II of II) This article summarizes the factors (and the empirical evidence) that the analyst may consider in the measurement of a discount for lack of marketability (DLOM) valuation adjustment associated with non-controlling securities of a closely held company. This security-level DLOM is different from the entity-level DLOM that is app ...

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Discounts for Lack of Marketability

Consideration for Closely Held Securities, Part I of II Valuation analysts may be asked to value closely held company securities for various reasons. These reasons include transaction pricing, financial accounting, taxation planning and compliance, and litigation (related to both breach of contract and tort claims). Depending on: 1) the business valuation approaches and methods applied; and 2) the benchmark ...

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The Cost to Obtain Liquidity

Studies in the Closely Held Company Valuation (Part II of II) In the first part of this two-part discussion, the author identified six transaction risk factors attempting to sell a controlling (including 100 percent) interest in a closely held company. Those included: 1) an uncertain time horizon to complete the offering or sale; 2) “Make ready” accounting, legal, and other costs to prepare for and execute ...

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Measuring the DLOM for a Closely Held Company Controlling Interest

Six Transaction Risks Owners Face Selling a Company that May Explain DLOM (Part I of II) In this first of a two-part article, Robert Reilly reviews the various models analysts use to estimate the DLOM and factors analysts consider in the DLOM selection. Valuation analysts often value closely held companies for transaction, taxation, financing, accounting, litigation, and other purposes. Depending on: 1) the ...

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Estate of Newberger v. Commissioner

What About Subsequent Events—Lessons from the Valuation of Artwork? In the December 2015 Tax Court Memo Estate of Newberger v. Commissioner, the Tax Court considered post-date-of-death sales prices in the valuation of three separate pieces of artwork owned by the decedent. Considered in one instance was the sale of the actual piece of art itself, and in two other instances, the sale of other pieces of art c ...

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Using PPA Data as Comparables in Upcoming Valuations

The Case of Trademarks and Brands Since the adoption of fair value accounting governed by SFAS 141 (in 2001) and IFRS 3 (in 2004), hundreds of thousands of different intangible assets have been valued, audited, and reported in financial statements of public companies all over the world. After fifteen years of fair value accounting, the debate about the accuracy of such values and their relevance for readers ...

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Auto Dealership Business Valuations

Nuances Valuing and Normalizing an Auto Dealership There are many reasons an auto dealership may require a business valuation; buy-sell agreements, shareholder disputes, employee stock ownership plans (ESOPs), and estate planning and gifting strategies. In many instances, there will be an opposing party that questions the validity of the final value, whether it be a dissenting stockholder or the Internal Re ...

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Book Review—A Consensus View Q&A Guide to Financial Valuation

Hitchner, Pratt, and Fishman Answer the Call In the past month, business valuation professionals have read reviews from a number of practitioners serving as reviewers for the Q&A Guide. All of them are positive. In this book review, we go into a little more detail and discuss what these established and accomplished business valuation professionals and leaders answer in the Q&A Guide. So, what does t ...

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WikiLeaks Delivers—Valuation Reports From Top Firms (Deloitte, KPMG, E&Y, Houlihan & SVB)

Benchmarking Your Reports and Examining What Hypothetical Conditions and/or Extraordinary Assumptions You Have Made! However, thanks to WikiLeaks, “The Interview”, and Sony Pictures, a rather sizeable repository of sample reports exist free of charge. These reports, as you might expect, are from the transaction arms of Big Four firms as well as leading national shops. Anyone who has been doing this for a wh ...

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Consider Market Approach Intellectual Property Valuation Methods

IP Valuation—Beyond the Income and Cost Approach Valuation analysts (“analysts”) are often asked to value debtor company intellectual property (IP) within a business bankruptcy context. Some of the bankruptcy reasons to value IP include the assessment of the following: the debtor’s solvency, a secured creditor’s collateral and protection, the fairness of a Section 363 IP asset sale or license, the debtor’s ...

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When Should an Appraisal be Attached to a Return?

Disclose Now or Later? There is no requirement to attach an appraisal for an estate of gift tax return, but having been involved with the classification of returns at the Cincinnati Service Center located across the river in Covington, Kentucky, I want to share my thoughts on when it is appropriate to attach an appraisal done for gift and estate tax purposes. ...

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