Complying with Rule 26 of the Federal Rule of Civil Procedure (Part V of VII) What does Rule 26 of the Rules of Federal Civil Procedure provide? Using FRCP 26 as a basis for what is needed in federal court and possibly state court, the author discusses what is required from experts in their report.
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Consideration for Closely Held Securities—DLOM Theoretical Models (Part II of II) This article summarizes the factors (and the empirical evidence) that the analyst may consider in the measurement of a discount for lack of marketability (DLOM) valuation adjustment associated with non-controlling securities of a closely held company. This security-level DLOM is different from the entity-level DLOM that is applied at the closely held company level. This second part of the article focuses on theoretical DLOM measurement models: the option pricing and DCF models.
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Hidden Headaches of Jointly Owned Annuities Annuities are considered wonderful vehicles for savers, no more so than for married couples. The opportunity to obtain tax-deferred growth in a non-qualified deferred annuity is a key feature, particularly for individuals in high tax brackets who have already maxed out other available tax shelters. However, annuities present a significant complication. Michael Kitces, FinancialPlanning contributing writer, does an excellent job describing what to look for. To read the full article in the FinancialPlanning, click: Hidden Headaches of Jointly Owned Annuities.
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Brexit Market Losses Reached a Record $2T Global markets lost more than $2 trillion in paper wealth following news that the UK had voted to leave the EU. That made the largest single-day drop in history, surpassing a $1.9 trillion sell-off during the financial crisis in September 2008. Edward Krudy describes what happened. To read the full article in Reuters, click: Post-Brexit Global Equity Loss of Over $2 Trillion Worst Ever: S&P.
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Guidelines Released for Employee Wellness Programs The Equal Employment Opportunity Commission has released guidelines for structuring employee wellness programs that adhere to health privacy regulations and anti-discrimination rules. Employers should notify workers about how their health data will be used and encrypt sensitive information to ensure confidentiality. Bertha Coombs, CNBC reporter, also suggests that wellness screening programs should be voluntary. To read the full article in CNBC, click: Obama Administration Issues Rules for Employee-Wellness Plans.
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Will Your Methodology be up to Snuff? Beyond Frye and Daubert (Part IV of VII) The methodology employed by the expert is a critical factor determining the admissibility of the testimony. Frye, Daubert, and Kumho provide guidance regarding the admissibility of the testimony. In this article, the author discusses these and recent cases, including: Manpower, Inc. v. Insurance Company of the State of Pennsylvania; United States v. Alabama Power Company; United States v. Cinergy Corp., to illustrate the how courts have decided motions to exclude.
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Consideration for Closely Held Securities, Part I of II Valuation analysts may be asked to value closely held company securities for various reasons. These reasons include transaction pricing, financial accounting, taxation planning and compliance, and litigation (related to both breach of contract and tort claims). Depending on: 1) the business valuation approaches and methods applied; and 2) the benchmark empirical data used, these analyses may initially conclude the security value on a marketable basis. This initial conclusion may result if the analyst relied on capital market data to extract pricing multiples, present value discount rates, or direct capitalization rates. In…
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One Way to Address Succession Issues With leaders from the baby-boom generation retiring, the CPA profession is looking for new leaders to step forward. This has increased the urgency around retaining and developing women in leadership positions in the profession. Ken Tysiac, JofA editorial director, reports. To read the full article in the Journal of Accountancy, click: Succession Issues Likely to Fuel Urgency Around Retention of Women CPAs.
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Three Pointers for Choosing a Company Retirement Plan Simple IRAs and 401(k)s are typically the best retirement-plan options for companies with more than 10 or 15 employees. Kathy Kristoff, finance writer, explores what to consider when setting up such plans, including the safe-harbor provision and the discrimination tests that apply to 401(k) plans. To read the full article in Inc., click: Pick the Right Retirement Plan–for Both You and Your Employees.
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Accounting-Related Class-Action Suits Rose In 2015 The number of securities class-action lawsuits related to accounting rose to a four-year high last year, with 71 actions filed, according to a study from Cornerstone Research. The total value of settlements in these cases also rose significantly, surpassing $2.6 billion. Michael Greene explains that these cases often involve allegations of internal-control weaknesses. To read the full article in Bloomberg BNA, click: Accounting-Based Class Suits, Settlements Reach New Highs.
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The Appraisal Practice Board of the Appraisal Foundation released The Valuation of Customer-Related Assets. As Karolina Calhoun, senior financial analyst with Mercer Capital, explains, the non-authoritative best practices guidance elaborates on valuation approaches and methodologies that can be used to measure fair value of customer-related intangible assets. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Appraisal Foundation Releases Final Guidance on Fair Value Measurement of Customer-Related Assets. 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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The Question of Admissibility (Part III of VII) Are you ready to serve as an expert witness? Your training and experience are critical factors establishing your qualifications, but not a license to testify on matters beyond your scope of expertise. In this article, the author shares her experience evaluating your admissibility as an expert.
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How do Sponsorships Rank as a Strategy for Business Development? How effective are sponsorships developing business leads? Sponsorships provide visibility to a captive audience and ideally convey the firm’s commitment to the cause or event. In this article, Dr. Frederiksen shares his findings on this subject, as well as discusses findings involving the pay to play sponsorships and the community sponsorship models.
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Forum Discusses Future State of the IRS Nina Olson, the national taxpayer advocate, heard from tax practitioners and taxpayer groups on how the Internal Revenue Service can modernize its taxpayer services. Troy Lewis, chair of the AICPA’s Tax Executive Committee, called for better training and technology and IRS cooperation with stakeholders. Ann Marie Maloney, AICPA communications manager, reports. To read the full article in the Journal of Accountancy, click: IRS Future State is Not a One Size Fits All.
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The Benefits of Active Listening Practicing active listening can be difficult in the distraction-filled business world, but it’s critical for engaging employees and letting them know you value their ideas and opinions. Managers should still ask for input and feedback from their direct reports even if they aren’t sure they will be able to fix the issues that are raised. Samantha White, CGMA Magazine senior editor, explains. To read the full article in CGMA Magazine, click: How to Listen Like a Pro.
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The regulator says the firm had “widespread failures” in its anti-money laundering programs for both its employee and independent channels. This is the largest penalty the regulator has dished out for that type of infraction, describes Andrew Welsch, senior editor of On Wall Street. To read the full article in Financial Planning, click: FINRA Fines Raymond James Record $17M for Compliance Failures.
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This blog outlines some recent changes to the impairment testing regime which provides corporate finance managers with periodic updates and commentary around several topics including impairment testing. Lucas Parris, senior member of Mercer Capital’s Financial Reporting Valuation Group, provides some insight as to what impact this may have. To read the full article in Mercer Capital’s Financial Reporting Blog, click: New Rules for Goodwill Impairment? 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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Estate, Gift, and Tax Projects in the Horizon At the ABA Mid-Years Tax Section Meeting, Cathy Hughes and Melissa Liquerman of the IRS Office of Chief Counsel revealed a number of projects that are underway at the Service. In this article, several of those projects pertinent to valuation analysts are discussed, including the status of sec. 2704 regulations.
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What is Generally Accepted by the Relevant Community? (Part II of VII) What is the Frye standard? How does it differ from Daubert? In this article the author details the Frye standard and what is “generally accepted”.
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Could that Opinion Survive a Daubert Challenge? (Part III of III) This is the third and final article of the series. Part I provided background for this thought exercise and identified the size of the hole the 76ers had to climb out of to make the playoffs. Part II addressed the path an expert might take to arrive at his or her opinion. This part addresses the implications of the thought exercise on valuation-related Daubert challenges. It may appear that an opinion related to the 76ers’ chances of making the 2015-16 playoffs has no bearing on valuation-related (or other) Daubert…