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 ...

Advising Your Business-Owner Clients on Transitions As baby boomer entrepreneurs move toward retirement, their advisers should ask a series of questions about their financial and emotional states to help them plan their exit strategies.  Patricia M. Annino, JD, suggests, among other things, advisers should ask about how quickly clients want to sell, how the sale will affect their families, and whether they ...

Federal Agencies Face New Disclosure Requirements for Public-Private Partnerships Federal agencies will be required to present disclosures about public-private partnerships in their general-purpose financial statements under guidance issued by the Federal Accounting Standards Advisory Board.  Ken Tysiac, JofA editorial director, discusses the standard. To read the full article in the Journal of Accountancy, ...

The debate over the use of non-GAAP performance measures continues.  Even as the prevalence of these items grows in the financial reports of public companies, cautionary tales of the uses and abuses of such metrics garner headlines.  Lucas M. Parris, senior member of Mercer Capital’s Financial Reporting Valuation Group, explains. To read the full article in Mercer Capital's Financial Reporting Blog, click: ...

Electronic Communication can be Fraught with Peril for the Unwary CPA Electronic communication can be fraught with peril for the unwary professional. CPAs who become over-reliant on this form of communication confront increased professional liability risk. This column explores some of the more common risks CPAs may encounter with electronic communication and discusses how a professional can make appropriate ...

Economic growth in the U.S. registered a frail 0.5% in the first quarter; the worst showing since Q1 of 2014.  A strong dollar and a drive by businesses to draw down inventories contributed, as did slow investment due to low oil prices.  However, Lucia Mutikani discusses that analysts are optimistic the pace will pick up as some stifling factors fade in coming quarters. To read the full article in Reuters, ...

Companies Plan Cost Reductions Over Economic Concerns Spurred by concerns over the global economy, 88% of respondents to a survey of senior executives at Fortune 1000 companies say they are planning to look for ways to cut costs in the next two years.  Matthew Heller explains. To read the full article in CFO.com, click: 88% of Firms Planning Cost Cuts in Next Two Years. ...

Three Apps That Can Make Traveling Easier Apps for last-minute hotel booking, finding your way through traffic, and booking flights can make your travel experience more enjoyable.  Greg LaFollette, strategic adviser with CPA.com, provides some tips to breeze through your next trip. To read the full article in the Journal of Accountancy, click: Expanding Your App-titude. ...

In Part 1, Travis W. Harms, Mercer Capital Financial Reporting Valuation Group lead, walked through the mechanics of the option pricing model (OPM) with a view to making the model more intuitive to non-specialist report users.  In this post, he addresses the model from a more qualitative perspective, evaluating the model’s use and potential misuse in practical application. To read the full article in Mercer ...

Differences Between the Two Values Damages remedies often focus on lost profits and lost business value, with such remedies typically calculated by financial experts. There continues to be a trend in the courts to preclude experts from testifying, or to disregard them altogether because their opinion does not meet the reasonable certainty standard. Either of these outcomes can be a devastating result for th ...

The informational interview can show off your initiative and soft skills to a potential employer.  However, the convenience of online fact gathering has caused the informational interview to fade.  But, as Sabine Vollmer, senior editor of CGMA Magazine, explains, a new generation of job-seekers is rediscovering this classic networking tactic. To read the full article in CGMA Magazine, click: How to Turn a C ...

There's a window of opportunity before clients reach age 70 in order to mitigate some of the bite.  Paul Norr shares some great tips to prepare your clients for their future years. To read the full article in Financial Planning, click: Avoid the Social Security Tax Trap. ...

A merger or acquisition is a critical move, and many don’t work out.  Are you ready to make the jump?  John J. Bowden Jr. explores some topics you should consider first. To read the full article in Financial Planning, click: How to Play the M&A Game. ...

The option pricing model, or OPM, is one of the shiniest new tools in the valuation specialist’s toolkit.  Travis W. Harms, Mercer Capital Financial Reporting Valuation Group lead, discusses the purpose of this post is to clarify the fundamental insight underlying the model and illustrate its application so that non-specialist users of valuation reports can gain greater comfort with the model.  Part 2 will ...

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 ...

Mergers and acquisitions (M&A) have continued growing since 2008’s financial crisis.  Through the first three months of 2016, the value of worldwide M&A totaled nearly $750 billion.  Cross-border M&A activity totaled $308 billion—accounting for a quarterly record-high 41% share of global M&A value.  As in previous years, M&A in industries with hefty intangible assets—such as pharmaceutic ...

Getting Your Groove Back After Tax Season The adrenaline rush is over, the returns are filed and vacation beckons.  However, post-busy-season blues may creep in, observes Cari Weston, CPA, director of the AICPA's Tax Practice & Ethics Team and a former tax practice owner.  She offers ways you can learn from the past season to move your practice forward and celebrate being a tax practitioner.  Want to ex ...

How to Avoid Common Mistakes in Accounting Firm M&A Steer clear of these fatal flaws and your acquisition will have a much better chance of succeeding.  For firms that want to expand, Brannon Poe, founder of accounting practice brokerage firm Poe Group Advisors, explains how finding strategic solutions to potential roadblocks can greatly impact post-close results. To read the full article in the Journal ...

How to Keep a Meeting on Track Too often, people sit silently as meetings meander off course and drag on far beyond the scheduled time.  Joseph Grenny provides seven ways attendees can get meetings back on track, such as restating problems and making sure everyone understands their responsibilities. To read the full article in the Harvard Business Review, click: 7 Ways to Stop a Meeting from Dragging On. ...

The issue of dividends and dividend policy is of great significance to owners of closely held and family businesses and deserves considered attention.  This highly informative blog is excerpted from Z. Christopher Mercer’s (founder and chief executive officer of Mercer Capital) newest book: Unlocking Private Company Wealth. To read the full article in Mercer Capital's Financial Reporting Blog, click: An Int ...