In Related-Party Cost Sharing Arrangements (Part I of II) This two-part paper demonstrates how the discount rate associated with the investment in intangibles developed under a cost sharing arrangement can be calculated using an analytical framework that explicitly considers variability of outcomes in profitability of the intangibles to be developed. Such framework is the probability-weighted scenario analysis. The method of calculating discount rates using the scenario analysis can be applied to compute the PCT payment under both the “income method” and the “residual profit split method” described in the U.S. transfer pricing regulations. The same method also allows to calculate…
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Observations of Needs of Boomer Owners as the Exit Tsunami Begins Readers serving as advisors to privately held business owners stand in the position of being the authority when it comes to topics such as growth and exit planning. This QuickRead article is written to share the research on the privately held business owner market and mindset, which points to important considerations for business owners who are considering and/or executing upon a plan to grow and/or exit their privately held business. The article covers five important issues that will enable advisors to understand the opportunity in this market, an opportunity…
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The Art and Science Most businesses have special characteristics that affect its value. Some are endemic to the industry and some relate to the personal nature of those managing the business. Wealth management businesses have both characteristics. Here are some considerations that go into determining the valuation. Most businesses have special characteristics that affect its value. Some are endemic to the industry and some relate to the personal nature of those managing the business. Wealth management businesses have both characteristics. Here are some considerations that go into determining the valuation. Defining a Wealth Management Business Wealth management businesses manage investible…
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To Attract or Retain Key Employees To both attract and retain key employees, many private companies have added stock-based compensation grants to their portfolio of employee compensation arrangements. An important component of any private company stock-based compensation arrangement is the value of the private company stock. Therefore, private company clients expect valuation analysts to be at least generally familiar with the management considerations related to such stock-based compensation programs. This discussion summarizes some of the basic—but important—income tax considerations about the compensatory transfer of employer corporation stock. This discussion summarizes both the employer’s and the employee’s federal income tax considerations…
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Asset Values (Part III of III) This is the third of a three-part article that focuses on valuing nonprofit corporation assets. Valuation analysts are commonly engaged to provide fair market value guidance related to nonprofit business transactions. Nonprofit businesses are often involved in arms-length transactions. Common transactions include royalty payments for the use of intellectual property, royalty revenue earned by licensing intellectual property, sales of assets, and purchases of assets. If the subject transaction is between a nonprofit and a related party, the transaction is required to be a fair market value transaction. This series provides an example of certain…
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Get New Work at Fees I Can Live With When it comes to getting new work, one of the required steps is writing what amounts to a combined proposal/engagement letter. It’s more of a proposal if you’re assuming what the prospect wants; it’s more of an engagement letter if you spend time finding out what the prospect needs. But semantics aside, preparing these letters is a lot of work. Given that, what is your proposal win percentage? Are you content with your fees on the proposals you win? If your answer is “no” or “not always,” this article may help.…
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Asset Values (Part II of III) This is the second of a three-part article that focuses on valuing nonprofit corporation assets. Valuation analysts are commonly engaged to provide fair market value guidance related to nonprofit business transactions. Nonprofit businesses are often involved in arms-length transactions. Common transactions include royalty payments for the use of intellectual property, royalty revenue earned by licensing intellectual property, sales of assets, and purchases of assets. If the subject transaction is between a nonprofit and a related party, the transaction is required to be a fair market value transaction. This series provides an example of certain…
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Nine Steps to Engage Your Audience Hinge’s latest research on high-growth accounting and financial services firms makes the case that your firm should consider adding educational webinars into your marketing mix. Hinge’s latest research on high-growth accounting and financial services firms makes the case that your firm should consider adding educational webinars into your marketing mix. Why? Well only 34.9% of these firms reported that they conducted webinars last year—and it seems that for those who did, they were worth the effort. In terms of perceived impact, conducting educational webinars was the third most impactful marketing technique used in this…