Shannon Pratt remembers what led him to BV and discusses industry growth in the ’90s Neil Beatonshares his love of numbers, describes how Practice Aids help, and remembers the ‘Wild West’ days of early BV Rod Burkertdescribes difficulties of calculating DLOM and explains why professional specialization is critical Chris Mercer extols LinkedIn and explains how marketability discounts are linked to BV standards Robert Reilly tells how BV credentials provide enormous benefit in the courtroom and why fair value accounting is taking over U.S. GAAP Michael Kaplan explains how a teaching background helped CFFA program development and explains why valuation will…
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Lari Masten discusses the importance of the Harmonic Mean metric when using the Market Approach Curtis Bernstein discusses testing assumptions in healthcare Karen Kaseno shares smart tips for managing your receivables Richard Gray discuss the importance of comparables when valuing partnership entities Jim Harrington discuss the importance of data sets Frank Rosillo discusses the importance of good report writing techniques when conducting business appraisals
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Espen Roback (28:26) tells how he grew up in Norway, describes his work with the ‘Ebay of Illiquid Securities,’ and the way appraisers can provide value through consistency Brent Sloan (18:44) talks about his focus on Fair Value and why Financial Reporting most interested him because of his M&A background. Peter Agrapides (20:50) tells how NACVA offered him his first job, and shares thoughts for today’s undergraduates interested in accounting Tracy Coenan (11:40) explains why she chose a professional focus on tax fraud, money laundering and divorce, how she develops new business, and what she does for fun Lari Masten…
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Alphabet Soup AccountingToday‘s Danielle Lee writes that “A growing roster of professional designations fosters credential-mania,” among CPAs, and devotes an article to surveying some of the most popular credentials today, including those from NACVA: The CVA. The National Association of Certified Valuators and Analysts’ CVA credential does require a CPA license, along with coursework and an exam. Established in 1991, the credential is now held by more than 4,000 designees. The CVA is “extra important because the profession – valuating businesses – is in a constant state of change,” said Mark Morris, chair of NACVA’s valuation credentialing board. “New theories…
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Why Most Investors Don’t Measure Returns Correctly At the NY Times Bucks: Making the Most of Your Money blog, Carl Richards opines: There’s an old saying that you should take a look at your checkbook and your calendar to see what you really value as opposed to what you say you value, because the calendar and the checkbook never lie. Dollars and cents are easy to count in the checkbook. Happiness, on the other hand, isn’t a line item in the ledger. It’s much more difficult to say we’re happier today than yesterday because we coached our children’s sports team…
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Business-For-Sale Market Heats Up So writes Angus Loden at The Wall Street Journal blog In Charge: On the challenges of entrepreneurs managing their businesses. Sales of small businesses rose 8% in the second quarter over the same period last year, hitting the highest level since the closing months of 2008, with a growing number of smaller firms finding buyers, according to business-broker data. Getty Images From April to June, sales of 1,198 small businesses on the market closed, up from 1,106 in the second quarter of 2010, according to BizBuySell.com, an online small-business marketplace based in San Francisco. The median sale…
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House lawmakers passed a bill today to overhaul the U.S. patent system for the first time in nearly 60 years, Nathan Koppel notes on the Wall Street Journal Law Blog: The House passed the America Invents Act on a 407 to 117 vote, WSJ reports. The bill would change how the U.S. grants patents and award them to the party which is “first to file” an invention instead of the “first to invent” it. The change would bring the U.S. in line with other countries, according to WSJ. The Senate passed similar legislation in March on a 95-to-5 vote. (Click here to see…
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David Wanetick, Managing Director at IncreMental Advantage, LLC, a valuation firm with expertise in valuing intangible assets and emerging technologies, based in Princeton, NJ, opines at The Business Insider: Valuing a patent is complex and imperfect. Below we’ll go into some detail surrounding the methods used to determine a patent’s value. Each is applied under different circumstances, and impacted by many factors. Some of these factors can be measured and quantified, while others are intangible and require expert judgment in order to attain a reasonably accurate estimation of value.
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Who Is the Mystery Hamptons Moneybags? asks the New York Times DealBook. The hunt is on for the New York mogul with questionable cash management skills. Speculation bubbled on Wednesday after a receipt left hanging out of a Capital One ATM in East Hampton that displayed its owner’s remaining balance as $99,864,731.94 — yes, that would be $99 million and change — was posted on Dealbreaker. The receipt, which appears to show a $400 cash withdrawal from a savings account plus a $2.75 ATM fee, was rumored to belong to the Appaloosa Management honcho David Tepper, who made billions during the…
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The Accountable Care Fiasco That’s what the Wall Street Journal calls the state of developing real-world guidelines for “the Accountable Care Organizations that are supposed to be the crown jewel of cost-saving reform.” The theory for ACOs, as they’re known, is that hospitals, primary-care doctors and specialists will work more efficiently in teams, like at the Mayo Clinic and other top U.S. hospitals. ACOs are meant to fix health care’s too-many-cooks predicament. The average senior on Medicare sees two physicians and five specialists, 13 on average for those with chronic illnesses. Most likely, those doctors aren’t coordinating patient care. This…
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Lawyers and Accountants Once Put Integrity First So asserts Mark W. Everson, commissioner of the IRS from 2003 to 2007, in an opinion piece for the Sunday NY Times: Three or four decades ago, investors and regulators could rely on these professionals to provide a check on corporate risk-taking. But over time, attorneys and auditors came to see their practices not as independent firms that strengthen the integrity of capitalism, but as businesses measured chiefly by the earnings of their partners. . . . Recent decades have seen a new model take root: a business plan tied to partner earnings. Obviously,…
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No Parties After IFRS Adoption in Canada When measuring the costs of IFRS implementation, there are the not-at-all trivial costs of changing accounting methods. But there are also opportunity costs of spending time becoming IFRS compliant that you could have spent doing something other things. “The greater cost has really been the diversion of intellectual capital during this time period from doing more productive pursuits than the IFRS conversion,” opines a vice president at Canadian Tire. At CFO Journal Emily Chasen reports that IFRS adoption by our neighbors to the north has been anything but easy: If U.S. regulators want to get a…
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SEC Wakes Up to Reverse Merger Companies Weeks after several Chinese reverse-merger companies have stopped trading in the US amid widespread fraud allegations, the Securities and Exchange Commission has issued a warning that, hey, maybe investors ought to think twice about those reverse-merger companies. Okey doke! Mark Gongloff relays from the Wall Street Journal Law Blog. The Securities and Exchange Commission issued an investor bulletin that said “there have been instances of fraud and other abuses involving reverse merger companies” and that investors “should be careful” when they consider investing in the companies’ stocks. The SEC has said it is investigating the…
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Forbes reports: In the last (pre-drinking) session at the D: All Things Digital conference at the Terranea resort in Rancho Palos Verdes, California on Wednesday, we heard from Marc Andreessen, co-founder of venture capital firm Andreessen Horowitz, and founder of Netscape and various other tech start-ups. Chatting him up: Walt Mossberg and Kara Swisher. Perhaps the biggest takeaway from the session: Marc simply doesn’t agree that there’s a tech bubble, and in fact says there is plenty of evidence that the public markets actually hate tech stocks right now. . . . but New York Magazine in a feature called “Bubble Vision” has…
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More Feedback: Editor: I read the May 2011 QuickRead – “Tips for Valuators” concerning stub years. I have run into this issue several times and I have seen it misapplied many times and I am glad you wrote about the topic. I noticed two points in the article that I believe need further clarification. The first thing that I noticed in the article is that the PV factors need to be modified as well if you are discounting them using a stub year. The present value factors in the article are straight factors calculated using a mid-year discounting convention that…
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Calculation Engagement vs Valuation Engagement. In April, QuickRead featured some analysis of In Re: Marriage of Hagar in our Case Law—State section. At issue in Hagar was the difference between a Calculation Engagement and a Valuation Engagement. The Calculation Engagement the husband in the case presented was deemed unsuitable by a judge, in this particular case, because it the valuator admittedly didn’t “use judgment.” NACVA member Charlotte Reith, CPA, CVA, CFF, of The Reith Company in Pasadena, CA wrote in to say she thought our analysis “is giving calculation engagements a bad name and is misleading. A rule of thumb valuation [used in Hagar] is not a calculation of…
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Have you had a chance to check out the Guard Series™ insurance policies? Since claims against BV practices and properly credentialed professionals have historically been quite rare, these policies are deeply discounted. NACVA and Primus Assurance Group (PAG) announced the policies’ availability last fall, and since then PAG has built out its web site with lots of detail: Providing Professional Peace of Mind Professional Errors and Omissions Liability Insurance is critical for valuation analysts and litigation support professionals in today’s litigious environment. That is why the National Association of Certified Valuation Analysts (NACVA) and Primus Assurance have tailored an…
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LinkedIn Features Booming CVA/AVA Activity Have you visited LinkedIn lately? The NACVA AVA/CVA Certification group as of this writing has 935 members. Follow the link and join in the conversation! This year is NACVA’s 20th Anniversary. What milestones do you remember being a part of? QuickRead’s Conversations with the Masters staff is preparing for an interview with Shannon Pratt. Do you have questions you suggest we pose him? Other LinkedIn conversations have ranged far and wide, with Association folks sharing information and offering tips on everything from how best to use the ValuSource Report Writer, the proper applicability of Benford’s…
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Lending Improves The Wall Street Journal reports that Small Business Lending Has Improved. A Braun Research survey performed for Capital One Bank found 85% of owners polled in March said they’re able to access the financing they need, up seven percentage points from the fourth quarter of 2010 and 15 percentage points from a year ago. . . . but Owners Fear Economic Uncertainty Economic Uncertainty, Spending Decline Top Owner Concerns. Respondents say the dearth of credit isn’t their most pressing concern. Sixty-eight percent cited economic uncertainty as the No. 1 challenge facing their business, followed by a decline in…
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Did you see the news? NACVA has partnered with the American Institute of Expert Witnesses (AIEWE), the organization dedicated to training and mentoring professionals in the art of delivering effective courtroom testimony, withstanding grueling cross-examination, and communicating persuasively to judges and juries. AIEWE courses will be offered through the Consultants’ Training Institute (CTI), NACVA’s training affiliate. NACVA has offered Expert Witness Bootcamps for more than five years, but AIEWE emerges this year as its own institution with a specific mandate to serve a broad base of business beyond financial consulting. “It doesn’t matter whether you’re defending a business valuation, challenging…