The Choice of Models and Considerations When Developing a Rate for Your BV Report (Part I of II) Why all the excitement about interest rate volatility? Can’t we just look at a multi-year average and use that in our calculations? Well, we could, but considering recent and expected volatility, that might lead to some big errors. There are several reasons. In this article, the author discusses various models a ...

(Part V) To look to the future of the BV profession, we must explore the relevant dynamics within the industry. That starts with looking to our past to see what events and milestones brought us to where we are today, followed by ascertaining the economic and demographic trends leading us into the future, and culminating with identifying those trends which will have the greatest impact upon the profession. N ...

More Than Just a Conversation What tools are available to assess an owner’s readiness to exit a business? What process exists to enable professionals to assist an owner with exit planning? This article is based on three tools presented and discussed at NACVA and the CTI’s July 2023 Business Valuation and Financial Litigation Super Conference. Those three tools are the Business Exit Readiness Index (BERI), t ...

First Steps in the Fraud Investigation The first steps in a fraud investigation are crucial to setting the tone and can set the stage for a successful, or lack thereof, investigation. This article details the first steps a company should take when initiating a fraud investigation, what experts will be necessary to uncover illicit behavior, and what parties need to be notified. Introduction Fraud is a pervas ...

Emerging Technologies, Emerging Ethical Risks This article summarizes points made at the Address at the 2023 NACVA Annual Conference. December 15, 2023 | Virtual Course: We Know Smart Contracts are "Smart" but Are They "Ethical"? Emerging Technologies, Emerging Ethical Risks It is not the business of the botanist to eradicate the weeds. Enough for him if he can tell us just how fast they grow. –C. Northcote ...

Move Out of Your Comfort Zone In this month’s column, Rod Burkert discusses embracing risk and a growth mindset. If you are unhappy with your practice for any reason, is it because you are playing it too safe ... too small? Is your reluctance to take risks (which aren’t really risks) holding you back from reaching the next level … whatever that might be for you? Read on, learn from a seasoned BVFLS expert. ...

A Case Study In articles published in The Value Examiner, “A Hybrid Approach to Estimating Company Specific Risk,” and “A Hybrid Approach to Determining Company Specific Risk: Using Monte Carlo Simulation,” the author explains the theoretical basis for using a company specific risk premium in the build-up method and presents a methodology for developing the company specific risk premium. Then he shows how t ...

Theory to Practice VPS StraightTalk Webinar, June 15, 2023 This article summarizes key takeaways from the June 15, 2023, VPS StraightTalk Webinar presentation co-led by R. James Alerding, CPA, ABV and Carli D. Lehr, CPA, CVA, CSEP. The speakers discussed how to differentiate between a projection and forecast, the importance of developing a reliable cash flow or projection evaluation of specific risk to the ...

in Business Valuations The advent of ChatGPT and its other AI apps has come to the forefront. This is potentially disruptive technology that will raise uncomfortable issues, but also open the door to innovation and new industries. AI will impact how business valuations are performed and the role of accredited professionals. This article discusses how AI and machine learning could impact the business valuati ...

(Part IV) To look to the future of the BV profession, we must explore the relevant dynamics within the industry. That starts with looking to our past to see what events and milestones brought us to where we are today, followed by ascertaining the economic and demographic trends leading us into the future, and culminating with identifying those trends which will have the greatest impact upon the profession. ...

Structured, Clear, and Well-Researched and Reasoned In a litigation setting, a well-written business valuation report can position your conclusion of value as credible. When completed for tax purposes, a well-written business valuation report can help avoid an IRS challenge. In any circumstances, a well-written business valuation report can provide the business owner with ways to increase cash flow and redu ...

Part Two in a Series Addressing Advances in Forensic Accounting and Financial Forensics The author of this series of articles is co-founder of Valid8 Financial Forensics Software, a Seattle, WA and Boulder, CO-based professional service provider. This second article, and those in the forthcoming series, set forth techniques used to investigate financial fraud allegations and the reliance and value of artifi ...

The “Least Bad” Method Determining a discount for lack of control (DLOC) is one of the more challenging tasks facing business valuators. The reason for this is the methodologies used each have weaknesses. In this article, David Goodman looks at two methods and explains the difficulties in relying on them. This is a case where business appraisers may need to rely on the “least bad” method … a term of art. De ...

An Interview with Zain Kalson, founder of Etheia As part of a broader dialogue around business valuations in the context of divorce, this article features an interview conducted by Andrew Thompson, Esq., with Zain Kalson, the founder of Etheia. The article discusses trends regarding how advanced data analytics are helping attorneys and experts sort through hidden assets, analyze expenses, and improve outcom ...

Tests of Reasonableness Business appraisers use tests that ask whether decisions made are legitimate and designed to remedy a certain issue under the circumstances. These tests are commonly referred to in the valuation literature as tests of reasonableness. Several methods have been suggested and employed (e.g., purchase justification test), but limited literature speaks to the use of a test of reasonablene ...

Evaluation of Your Priorities Most BVFLS practitioners happen to have fallen into this line of work by accident or chance. How can we prioritize and also find meaning and purpose in our profession. Rod Burkert shares his views on this subject. Henry David Thoreau said, “The price of anything is the amount of life you exchange for it.” This made me think, “How much of our lives are we exchanging for the pric ...

(Part III) To look to the future of the BV profession, we must explore the relevant dynamics within the industry. That starts with looking to our past to see what events and milestones brought us to where we are today, followed by ascertaining the economic and demographic trends leading us into the future, and culminating with identifying those trends which will have the greatest impact upon the profession. ...

Theory to Practice VPS StraightTalk Webinar, June 15, 2023 This article summarizes key takeaways from the June 15, 2023, VPS StraightTalk Webinar presentation co-led by R. James Alerding, CPA, ABV and Carli D. Lehr, CPA, CVA, CSEP. The speakers discussed how to differentiate between a projection and forecast, the importance of developing a reliable cash flow or projection evaluation of specific risk to the ...

A Sampling of What Construction Law Attorneys Say They Expect from Experts This article provides a summary of what attorneys, who are members of the Minnesota construction law section, heard at a recent CLE regarding what attorneys expect from experts. On June 13, 2023, Michael Gregory attended the Minnesota State Bar Association Alternative Dispute Resolution Section regarding the topic of “Solve the Probl ...

FRE 702—Challenging the Expert Witness: White Buffalo Environmental, Inc. v. Hungry Horse, LLC In modern litigation, expert witnesses have become nearly indispensable. As a result, motions to preclude those experts from testifying are almost inevitable. With the forthcoming amendment to Federal Rule of Evidence 702 clarifying both which party bears the burden of proof on challenging expert testimony and the ...