The Compensation-Productivity Nexus Affiliate employer agreements that do not involve designated health services may not be subject to Stark Law. However, where there is an ownership nexus—shared parent or direct subsidiary—between the hospital and affiliate employer, regulators may be able to find Stark Law violations. As governmental agencies drill down well beyond simple compensation comparatives, into t ...

Obviously, every equity compensation plan is different and the particular tax treatment of a given security depends on the facts and circumstances of the arrangement.  Samantha L. Albert, senior financial analyst with Mercer Capital, examines equity-based compensation and the tools available when examining these arrangements. To read more about the results of this report in the Mercer Capital's Financial Re ...

When Using Guideline Transaction Data Income taxes play a major role in the pricing and structure of business transactions because income tax consequences associated with the sale or purchase of a business can substantially reduce the seller’s net proceeds and/or lower the net cost of a purchased ownership interest to the buyer. Because of this issue, it seems appropriate to assume that actual transactions ...

An In-Depth Series on Healthcare Valuation This first installment will discuss Fair Market Value, the most prevalent standard of value in the healthcare industry, and why this is the required standard of value for most healthcare transactions. This article will also discuss the premise of value, which further defines the circumstances of the transaction, and how to determine which methods may be applicable ...

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 ...

Managing Expectations of Sellers and Buyers Using the Right Standard of Value The author presents eight standards of value that a valuation analyst may need to consider and discuss with a client. Each standard has a different set of rules and the valuations can vary greatly. Valuing a business is an art – not a science – even though careful calculations are made to arrive at an appraisal of the business. Th ...

In this second part of a two-part series, the authors discuss why and when the highest and best use standard should apply. ...

Traditional valuation methodologies have relied upon the analysis of historical accounting and other data as predictive of future performance and value. However, this may not hold true with every economy, industry, or even every enterprise within an industry, over time. For example, the turbulent status of the healthcare industry over the last five decades, since the passage of Medicare in the 1960s, has in ...

Valuators Take Note Fair market value is key to compliance with both the Stark Law and the Anti-Kickback Statue. Solid, well-reasoned valuations can be essential in establishing compliant arrangements, and these must consider practice losses as applicable. In this article, Lynn Gordon, Esq., states that it is “prudent to have a valuation in place that supports compensation as fair market value,” especially ...

The Art of Licensing Your Trademark What is the value of a name? A trademark? In this article, the authors discuss the traditional valuation approaches and their limitations deriving the fair market value of the trade name. ...

In this article, Robert Cimasi and Matthew Wagner provide a roadmap of the valuation and legal issues valuation professionals confront valuing a medical practice that also provides ancillary and technical component (ASTC) services. The fact that the ASTC services are often integrated with the professional services of a practice does not restrict the ASTC service line from having value separate and aside fro ...

This past summer, the firm of Pluris Valuation Advisors LLC released a detailed white paper on the valuation of life insurance. According to the authors, when valuing life insurance or life insurance-linked instruments such as split-dollar collateral assignment receivables or split-dollar promissory notes, there are only three elements of Fair Market Value. These include: Illustrations from the insurance co ...

It’s not as simple as it seems This article explores the fact that the valuation of a simple debt instrument, such as a promissory note, can be anything but simple. It is observed that the sum of unpaid debt, as well as accrued interest, may well overstate the value of the promissory note. Also covered is whether assets tied to notes need to be valued separately. ...

Beyond an all-or-nothing approach This overview examines the circumstances under which S corporations may or may not be tax affected. Particular emphasis is placed on family law engagements, which do not always involve a consistently defined standard of value, which creates much confusion for valuation analysts. ...

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.  ...

Buyers and Sellers Need to Negotiate Delivery Targets for Working Capital and Agree on a Fair Market Value for Fixed Assets. Valuation principles generally hold that the value of a business is largely a function of return on invested capital and growth, writes Ron Stacey, since these are the primary drivers of free cash flow. But how does this cash flow relate to the asset and liability values on the balanc ...

The “Market” is Not Always Right When it Comes to Value, Especially in M&A Transactions The mergers and acquisitions market began a slow recovery this last year after a sharp downturn in 2009. Was the slowdown caused by banks reducing lending activity, cash hoarding by businesses, economic uncertainty, or the simple failure of buyers and seller to agree upon price? Michael Blake takes a look at how valu ...

Enumerate Specific Assets, and a Specific Methodology for Those Assets If a fair market value is determined by multiple appraisers, it’s likely to be too high—and lead to a rush for the door, where the first doctor out wins. Here’s why. ...

Winning Skills and Strategies in Writing Exceptional Reports Tom Helling shows how to enhance your own reputation, build future business, and help clients solve problems in your written report. Key ingredients are careful logic, strong research, and good writing. Learn how to do it all. ...

Why There is No Such Thing as a Minority Premium Robert Buchanan of PCE Valuations writes about the application of discounts to fractional interests and argues that some appraisers are mistaken when they assert that certain levels of discounts amount to a “minority premium” for certain non-controlling interests. Here’s the logic behind his thinking. Be sure to read Mr. Buchanan's whole argument at HERE. Her ...