Buyer and Seller Beware When a privately-held acquirer uses its stock to partly purchase a company, it is imperative that both the acquirer and the target in a transaction have support for, and a level of comfort with, the value assigned to the acquirer’s shares if they are being issued as part of the deal. It is especially important for the seller to conduct its own due diligence to better assess its risk ...

What Do We Do Moving Forward in Time? The coronavirus and the events unleashed by the outbreak were unforeseeable to professionals preparing reports as of the end of 2019. What do we, as valuation and litigation support professionals, do moving forward in time when we are engaged to value a business? Here, the author, Ron Rudich, answers these questions. Gary R. Trugman wrote in his tome, Understanding Busi ...

Opportunities Available to Drive Revenue and Remain Relevant Q1 2020 is already in the books. If you are thinking about your practice development goals, strategies, and tactics for the rest of the year, Rod Burkert has some ideas regarding what to do and identifies the opportunities associated with five options. Hard to believe that Q1 2020 is already in the books. And you might be thinking about your pract ...

Valuing Liabilities Differs from Valuing Assets Valuing contingent/unliquidated liabilities raises some interesting questions. Do contingent/unliquidated liabilities have liability-specific risk? If yes, does liability-specific risk result in lower or higher obligations? Why do contingent/unliquidated liabilities related to lawsuits tend to settle as opposed to go through verdict and appeals? This article a ...

Relevance and Alternate Approaches to Succeed Traditionally, accounting and financial services organizations have relied on their firms’ partners to “make it rain” or by using their connections, both personal and professional, along with a sprinkling of charisma, to bring in new business and revenue. How effective is this traditional model in a technology driven world where buyers of services can now access ...

Get Clients to Count on Your Accounting Is it the valuation of a small privately held company with three employees? Or a large multi-national with employees in the thousands? Perhaps it is reviewing assets in a highly contested divorce. One way or another, you are trying to reach a decision, an opinion, or a conclusion from the data in front of you. Using big data, you must compose a story and present the d ...

Valuation Issues for Wind and Mineral Surface Development Rights As wind energy has emerged as a leading source of energy, several issues have arisen with respect to the rights of parties holding surface and mineral rights. There are important legal issues that need to be explored to assess whether to develop a wind energy farm. This article provides a historical and brief legal overview of the issues. By t ...

Lost Profits and Loss of Business Value—Differences and Correlation in Terms of the Harmful Impact to Plaintiff’s Claims When a plaintiff suffers, or believes to have suffered, economic damages as a result of a defendant’s actions in a civil matter he/she and their attorney are faced with determining the amount of economic damage suffered. A damages remedy is provided to restore the plaintiff to the same ec ...

You Can Do It, Too How should a BVFLS practitioner first engage a prospective client? In this article, the author discusses how he engages prospects and the fee questions. It all starts with a phone call and the much-dreaded question: How much would you charge to value ABC Industries, Inc.? I don’t know … would you like me to guess? I mean, how could I possibly know without more details? For more years than ...

What Do the Courts Want? Finding the methodology for determining the appropriate discount rate in a lost profits case can be a convoluted journey. The numerator (the lost profits) may be adjusted through modeling. The denominator (the discount rate) may be a risk-free rate, a rate of return on investments, or the rate of return commensurate with generating the lost profits had no wrongful act occurred. And, ...

On the Valuation of Small Businesses What is the impact of coronavirus on small businesses? What should valuation analysts consider in light of the stock market downfall when valuing a small business. The author shares his thoughts on the impact of coronavirus when valuing small businesses. The coronavirus pandemic is wrecking havoc on the global economy as we have seen last week with the stock market crash ...

In Related-Party Cost Sharing Arrangements (Part II 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 anal ...

New Study Spotlights Five Proven Strategies There is an easy way to identify the most effective strategies for rapid growth. For the fifth year in a row, the Hinge Research Institute conducted a comprehensive study of more than 1,000 professional services firms. Specifically, Hinge looked at what “high-growth” firms (those with at least three years of 20% compound annual growth) do differently than firms th ...

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 analy ...

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 a ...

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 i ...

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 general ...

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 r ...

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 p ...

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 r ...