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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®).

Treatment of Selling/Employee Shareholder

Transition Period Payments After a Business Acquisition Owner’s of closely held businesses will usually be required to remain active in the business after the same is sold. This article examines two key questions related to such post-transaction transition payments: (1) how much should the buyer pay to the sellers for these transition period services, and (2) how should these transition period payments be s ...

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Look Before You Leap: Evaluating a Section 83(b) Election

Do you and your employees know how to get the most tax savings when choosing a benefit election?  Sujan Rajbhandary, senior member of Mercer Capital’s Financial Reporting Valuation Group, discusses an IRC Section 83(b) election and what’s considered in making this choice. To read more about the results of this report in the Mercer Capital's Financial Reporting Blog, click: Look Before You Leap: Evaluating a ...

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Equity-Based Compensation: Are Non-GAAP Earnings Misleading?

Stock-based compensation is used by companies of all shapes and sizes.  Travis W. Harms, leader of Mercer Capital’s Financial Reporting Valuation Group, explains from a valuation standpoint, the importance of measuring its fair value. To read more about the results of this report in the Mercer Capital's Financial Reporting Blog, click: Equity-Based Compensation: Are Non-GAAP Earnings Misleading?. This artic ...

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Probability Based Estimation and the DLOM Calculation

Refining and Selecting the Appropriate DLOM The discount for lack of marketability (DLOM) is the result of illiquidity. It represents the inability to sell quickly when an investor decides to sell an asset. It is the economic cost of failing to realize gains or to avoid losses during the time period that the investor or closely held business owner is trying to sell the asset or securities. In this article, ...

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Crude Oil

Price Stability vs. Market Share Bennet Kpentey, an Accra, Ghana management and financial consultant with a focus on the oil, gas, and energy sector, shares his views on the strategies of maintaining and increasing crude oil production and how the volatile energy prices will affect growth in emerging economies and other industries. ...

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New Rules Aim to Claw Back Incentive-Based Pay

The SEC has proposed new rules and requirements for certain types of incentive-based executive compensation.  Lucas M. Parris, Senior Member of Mercer Capital’s Financial Reporting Valuation Group, explains the rules and how they would apply. To read more about the results of this report in the Mercer Capital's Financial Reporting Blog, click: New Rules Aim to Claw Back Incentive-Based Pay.  This article is ...

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CFOs: This Year is Going to Be Bad

What is the predicted earnings and revenue outlook?  Mark Fahey, CNBC Data Journalist, interviews some chief financial officers for their thoughts and insight and what we should prepare for. Find out more on the CNBC article, click: CFOs: This year is going to be bad. ...

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Rules for the Modern Investment Manager

The SEC has proposed new rules and amendments that are more stringent and would alter requirements.  Mary Grace McQuiston, Senior Financial Analyst with Mercer Capital, offers insights and explores some of the ramifications these changes could bring. Read more about the results of this report in the Mercer Capital's Financial Reporting article, Rules for the Modern Investment Manager.  This article is repub ...

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8 Things You Need to Know About Section 409A

Are you aware of these interesting tips regarding Section 409A?  There may be more to it than you think.  Travis Harms, leading Mercer Capital’s Financial Reporting Valuation Group, answers eight questions to offer practical and comprehensive information about how Section 409A works. Read more about the results of this report in the Mercer Capital's Financial Reporting article, 8 Things You Need to Know Abo ...

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Are Family Limited Partnership Discounts About to End for Newly Formed FLPs?

Is There a Reason to Act Soon? Will the IRS Prevail this Time? The IRS is considering issuing proposed Section (SEC) 2704(b)(4) regulations to limit the availability of discounts for lack of control and lack of marketability. The article highlights the need to communicate with estate and gift tax attorneys that have discussed forming a FLP. While practitioners do not know what is being proposed, the §2704 l ...

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The S-Value Premium

Benefit or Boondoggle? Is the S corporation premium defensible? In this article, the author shares her views on this matter by answering the following questions: Should there be a premium applied to the S corporation whose value has been determined relative to the publicly traded C data by which it has been valued?” Are the assumptions we use to compare S and C attributes reasonable? Do they make sense? If ...

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Public Market Views of EBITDA: Exxon Mobil and Apple

Some very interesting implications can be noted comparing two different companies using EBITDA.  Z. Christopher Mercer, Founder and CEO of Mercer Capital, looks at how relying on EBITDA as a measure of cash flow can impact the valuation analysis conclusion if other measures are not considered. Read more about the results of this report in the Mercer Capital's Financial Reporting article, Public Market Views ...

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Portfolio Marks: 2Q15 Outlook

Key performance metrics for BDCs can help provide insight to the upcoming valuation marks.  Travis Harms, leading Mercer Capital’s Financial Reporting Valuation Group, looks at fair value measurement in relation to credit spreads and what may be expected in the upcoming portfolio marks. Read more about the results of this report in the Mercer Capital's Financial Reporting article, Portfolio Marks: 2Q15 Outl ...

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How to Value Venture Capital Portfolio Investments

This blog discusses the four-step process for providing fair value marks for venture capital fund investments in pre-public companies: 1) examining the most recent financing round economics, 2) adjusting valuation inputs to the measurement date, 3) measuring fair value, and 4) reconciling  and testing for reasonableness.   Sujan Rajbhandary, vice president in Mercer Capital’s Financial Reporting Valuation G ...

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Simpler Times Under ASC 805

In this post, Samantha L. Albert, senior financial analyst with Mercer Capital, talks about the FASB’s Simplification Initiative which is designed to make small changes to GAAP that will reduce costs and complexity, while maintaining or improving the usefulness of financial statements. One potential change announced on May 21, 2015 is to ASC Topic 805. The FASB has proposed modifying standards related to ho ...

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Commercial Real Estate, Chapter 11 Bankruptcy

Cram Down Interest Rates (Part II of II) In this two-part series the author provides as overview of the issues confronted by courts and financial experts involved in a commercial real estate (CRE) bankruptcy. Read the first part in this series here. In this second part, the author continues the discussion regarding how a financial expert may go about to determine the appropriate interest rate for the underl ...

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Commercial Real Estate, Chapter 11 Bankruptcy

Cram Down Interest Rates (Part I of II) In this two-part series the author provides an overview of the issues confronted by courts and financial experts involved in a commercial real estate (CRE) bankruptcy. In this first part, the author discusses how a financial expert may go about to determine the appropriate interest rate for the underlying claims and analyze the CRE market. In the second part of this s ...

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Second Fairness Opinions

Fairness opinions are offered by financial advisors, primarily, investment bankers on behalf of the Board of Directors who rely on them when considering a significant corporate event. The fairness opinion says that the impending transaction is fair from a financial point of view of the subject company’s stakeholders. As Jeff K. Davis, Managing Director of Mercer Capital’s Financial Institutions Group, expla ...

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