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 concerning fiduciary engagements and process requirements for employer stock transactions. The settlement provides pause for thought for all trustees and their advisors, as the agreement can be viewed as a “playbook” that, if followed, could serve as evidence that the…
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How to Encourage Fairness in Negotiations Parties often start with unreasonable offers when negotiating with one another, which can needlessly draw out the resolution process. Max H. Bazerman and Daniel Kahneman discuss how using final-offer arbitration can encourage all participants to start with more realistic offers. To read the full article in Harvard Business Review, click: How to Make the Other Side Play Fair.
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Deciding What Type of Foreign Entity to Set up The check-the-box rules that permit taxpayers to determine which form of business entity to create apply to foreign entities as well as domestic. In this article, Raymond Polantz examines the different tax issues involved in choosing, including tax rate differentials, income deferral and the availability of foreign tax credits. To read the full article in The Tax Adviser, click: Considerations on Whether to Check the Box for Foreign Subsidiaries.
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On Monday, September 26, Chris Mercer presented a webinar in which he examined the recently Proposed Changes to Section 2704 of the Internal Revenue Service Code from business and valuation viewpoints. To download the webinar, slides, and whitepaper from Mercer Capital’s Financial Reporting Blog, click: Recent Webinar on Proposed Changes to Section 2704. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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Conduct a Systematic, Structured Research to Get Results How can an existing marketing plan be improved? In this article, Dr. Frederiksen outlines five steps a firm can use to strengthen an existing marketing plan.
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Ways 16 through 30 (Part II of II) This is the second part of this two-part article where the author presents fifteen other structures owners may want to consider as part of a succession plan. Click here to read part one.
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“Dr. Expert, here is our theory for the case. Can you tell me if it’s possible?” Anyone see anything wrong with this? Can the lawyer be the one to come up with the theory for the case? Should lawyers run their theory by their experts? Annie Dike explains that whether or not their theory will pass muster under Daubert will depend not on its possibility but, rather, its plausibility. To read the full article in The National Law Review, click: Ensuring Plausibility Under Daubert—Anything’s Possible.
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Brexit Seen Delivering Brutal but Brief Blow to UK Economy The UK economy is on “a very different path” from that of a few months ago, with business investment and consumer spending due for a short, sharp post-Brexit shock, according to a forecast by the EY Item Club. The organization has slashed its UK growth forecast for 2016 to 0.4% from 2.6% and predicts the pound will be down 15% by year’s end. Gwyn Topham discusses the issue. To read the full article in The Guardian, click: UK Economy Must Endure ‘Short, Sharp Shock’ After Brexit Vote.
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Despite the inhospitable IPO climate, one tech company managed to brave the market with just the right mix of novelty and disruption to garner attention and reap rewards. Madeleine Harrigan, senior financial analyst with Mercer Capital, explains what happened when Twilio, a cloud communications platform designed to help developers add messaging, voice, and video to web and mobile applications, went public on June 23. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Twilio and the Rise of Debt Financing. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe…
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IRS Wins, Business Founders and their Families Lose Is cheap debt good for closely held families? Are closely held business overleveraged? Are FLP discounts about to come to an end? Why aren’t business founders and their families doing more to counter the proposed regulations that would target family business transfers? What should valuation professionals do in this environment? Dr. Sheeler answers these questions and argues in favor of a “holistic approach to wealth building of alternative assets held by these families by more dynamic leaders in these professions,” and suggests considering exit strategies that preserve family businesses; the nimble and…
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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 of financial security to the owner(s) and their family, and certainty to a host of people that have a business relationship with the subject business. Capturing that value should be a…
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Strategies to Generate Tax-Free Income From making contributions to Roth individual retirement accounts to renting out their homes for 14 days or less, Sean Williams explores seven tactics that clients can use to generate tax-free income. To read the full article in the The Motley Fool, click: 7 Ways You Can Earn Tax-Free Income.
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Start Your Succession Plan Decades in Advance Engaging in a decades-long succession-planning process can ensure that clients are taken care of and a practice continues to thrive after its founder retires. Recruiting young advisers can bring new ideas to your practice and help keep it going. Mike Lockwood, representative of Lincoln Financial Advisors Corp., explains. To read the full article in Wealth & Management, click: Succession Planning is Not About You. It’s About Your Clients.
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In August 2016, Pfizer announced it would acquire Medivation for $14 billion. The transaction made headlines for how the size of the deal escalated over a period of approximately six months prior to the announcement. In Part I of this series, Sujan Rajbhandary, senior member of Mercer Capital’s Financial Reporting Valuation Group, presented a broad outline of the PFE-MDVN transaction. Part II will delve more into the transaction to present some high-level observations around allocation of the purchase price. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Allocating Purchase Price for a Pharma Transaction—Pfizer Acquires Medivation…
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Part III of III This is Part III of a three-part series discussing the basic components of a professional liability lawsuit brought against an accounting firm and its partners, and factors a firm’s managing partner should consider before and during this type of litigation for utilizing applicable insurance coverage, maximizing effectiveness of defense, and, where possible, bringing the controversy to conclusion by settlement. Part I covered the current litigation environment for accounting firms, relevant provisions in engagement letters, responding to subpoenas, professional liability insurance, and the risk of instigating a professional liability counterclaim in a fee collection action. Part II…
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Copyright Protection and the “First-Sale” Exception In 1997 Supap Kirtsaeng, a citizen of Thailand, moved to the United States to study mathematics at Cornell University. He paid for his education with the help of a Thai Government scholarship which required him to teach in Thailand for ten years on his return. Kirtsaeng successfully completed his undergraduate courses at Cornell, successfully completed a PhD program in mathematics at the University of Southern California, and then, as promised, returned to Thailand to teach. While he was studying at Cornell, Kirtsaeng asked his friends and family in Thailand to buy copies of foreign…
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The Psychological Reasons Why People Fail to Save “Present bias”—the concept that people would rather have a smaller sum of money now than a larger sum of money in the future—is one cognitive bias that keeps people from saving, according to a new paper. Another problem is “exponential-growth bias,” which refers to a failure to understand compound interest. Derek Thompson, senior editor at The Atlantic, explains. To read the full article in the The Atlantic, click: The Two Biases that Keep People from Saving Money.
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“Most important, pensions should be required to uphold their original intent: to keep retirees who can no longer support themselves out of poverty.” Industry leaders weigh in on retirement news your clients may be thinking about. To read the full article in FinancialPlanning, click: How to Save Public Pensions, no Federal Bailout Needed: Retirement Scan.
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In August 2016, Pfizer announced it would acquire Medivation for $14 billion. The transaction made headlines for how the size of the deal escalated over a period of approximately six months prior to the announcement. Sujan Rajbhandary, senior member of Mercer Capital’s Financial Reporting Valuation Group, presents in this blog post (and Part II) a broad outline of the transaction and explore what a potential purchase price allocation would look like. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Allocating Purchase Price for a Pharma Transaction—Pfizer Acquires Medivation (Part I). This article is republished from Mercer…
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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 means to obtain needed discovery. Failing to obtain sufficient, reliable discovery can ultimately result in the production of a report that is incorrect and/or rejected by the courts.