In case you missed it, Z. Christopher Mercer, ASA, CFA, ABAR, founder and CEO of Mercer Capital, was the keynote speaker at the American Academy of Matrimonial Lawyers (AAML) and the American Institute of CPAs (AICPA) 2014 bi-annual joint conference this year. His presentation concerned The Five Really Big Valuation Issues. They included: 1.) discount rates, 2.) control premiums and minority interest discounts, 3.) adjustments to the income statement, 4.) the Guideline Public Company Method and the Guideline Transaction Method, and 5.) fundamental adjustments. The presentation also touched on marketability discounts. You can visit Mercer Capital at the link…
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Think like an investor, not an accountant! If fair market value is to determine investor expectations and equity risk; then why do these factors receive limited or no consideration when opining on the level of impairments (investor concessions) ubiquitously referred to ask discounts? This article addresses the business risks associated with asset-holding companies’ equity that should be considered and reported when preparing a valuation report.
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Ways to prevent costly misunderstandings One of the most important documents valuation, forensics, and litigation support experts produce is the engagement letter. Just as you painstakingly explain what your firm plans to do, it’s also imperative to explain what the client needs to do.
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Reimbursements from insurers, made to healthcare facilities for the care they administer, are an essential part of the valuation of hospitals, clinics, outpatient care centers and other facilities. As if that exchange wasn’t complicated enough, it’s about to go through another transition that very well may impact the valuation of all healthcare institutions. According to a new white paper released by McKesson, the existing fee-for-service model will be phased out by a new “value-based” payment model within five years. The survey, commissioned by McKesson and conducted by ORC International, estimates that by 2020, nearly 70 percent of reimbursements will…
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Do shareholders and boards have a reason to be concerned when a CEO separates or gets divorced? This is the question being asked in a fascinating white paper titled, Separation Anxiety: The impact of divorce on shareholders by David F. Larcker, Allan L. McCall and Brian Tayar of Stanford University Graduate Business School. The paper is part of the Rock Center for Corporate Governance at Stanford University Closer Look Series: Topics, Issues and Controversies in Corporate Governance and Leadership. Under investigation are three potential ways in which a CEO divorce might impact a corporation and its shareholders. These include:…
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The American Institute of CPAs (AICPA) recently sent a letter to the IRS calling a proposed “voluntary” certification program for unenrolled tax return preparers “unlawful and improper”. In a recent ruling, Loving, No. 13-5061 (D.C. Cir. 2/11/14), it was held that the IRS does not have the statutory authority to regulate tax return preparers. In the aftermath, IRS Commissioner, John Koskinen, stated that while the agency may look to Congress to grant the authority it seeks, it was considering implementing a “voluntary certification program” in the meantime, calling it “continuing education”. In a strongly-worded response to the IRS, the…
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CPAs can increase billings by catering to exiting baby boomer business owners. Baby boomer businesses may represent a material percentage of a CPA firm’s clientele. As a record number of these business owners begin the succession/exit process, hidden opportunities exist for firms to increase billing, if you know how to spot them.
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Breaking down invisible value Read Part 1 here. This overview is the second half of Robert Reilly’s series that examines the types of intellectual property analyses, different standards of value that may apply in valuation as well as the alternative types of intellectual property ownership interests and the alternative terms of intellectual property ownership interests. Finally, it offers a discussion regarding the factors that the business appraiser may consider in the specific identification of intellectual property.
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Intellectual Property Valuation Principles—Part 1 This article examines the types of intellectual property analyses, different standards of value that may apply in valuation as well as the alternative types of intellectual property ownership interests and the alternative terms of intellectual property ownership interests.
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Limiting the potential for abuse and delay Discovery can reduce the costs of litigation, but it can also be used to harass and delay. There are a number of things that counsel and a forensic professional can do to limit the misuse of the discovery process, save costs, and lead to a settlement.
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As if the general public hadn’t lost enough faith in the stock market with recent revelations of rigged deal-making that benefits only a few, a new study shows that 25 percent of all M&A deals between public companies involve some kind of insider trading. The study, conducted by McGill University and New York University, looked at informed trading activity in equity options prior to the announcement of corporate deals. The study’s abstract states: For the target companies, we document pervasive directional options activity, consistent with strategies that would yield abnormal returns to investors with private information. This is demonstrated…
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A standard distinct from the fair market value standard The fair market value is distinct from the commercial reasonableness standard. The article highlights how these standards are applied in a healthcare transaction and why it is important to distinguish these standards.
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Capitalizing on the trend The need for transition planning services has grown over the years and will continue, representing a lucrative and successful practice area for financial professionals. Harry Haigley, CVA, MBA, explains what practitioners can start doing to build their practice today.
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You know how it goes. Some billionaire or corporate conglomerate throws out a huge bid for a business acquisition that everyone is certain is way over the top. It’s impossible such an outlandish offer could be profitable or even justified based on the subject entity. From the LA Clippers $2 billion sale to the next windfall for a teenage phenom who creates a gimmicky phone app; it seems as if one of these big-dollar offers hits the press every week. Regardless of how outlandish the offer might be, sometimes overkill does pay off. Inc.com looks at five huge deals that…
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The Public Company Accounting Oversight Board (PCAOB) has beefed up its requirement for auditors to clarify the nature of relationships and transactions between related parties. The new standards were instituted by the PCAOB to counteract a number of factors that it felt were contributing to financial fraud. Ultimately, the intention is to help companies avoid financial failure and reduce harm to investors. To review the three key areas the PCAOB is stressing in its revised standard, please visit Goingconcern.com. [button color=”blue” link=”http://goingconcern.com/post/pcaob-adopts-auditing-standard-no-18-crony-disclosures” target=”_blank” font=”arial” align=”left”]Read Full Article[/button]
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Benchmarking the firm’s performance We all know financial ratios are a barometer of the health of a company. Now, let’s help our client’s unleash the power of these ratios to improve their businesses. Here’s how.
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Compensation for PCPs is increasing The increasing supply shortage of primary care physicians (PCPs) will have a significant impact on physician compensation. In turn; this will have an equally powerful effect on the valuation of PCP practices.
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More than a decade in the making, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have released a converged standard on revenue recognition. Titled, “Revenue from Contracts with Customers”, the standard is designed to enhance the process of revenue reporting and improve comparability in financial statements among corporations using IFRS and U.S. GAAP. The standard also impacts the sale of nonfinancial assets to noncustomers, such as real estate. In an in-depth interview with Accounting Today, FASB member, Marc Siegel expanded on this example, stating, “Even though you might not be a home builder and…
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In a windfall for the IRS, 77,000 foreign banks have turned over data on American account holders as part of the Foreign Account Tax Compliance Act (FATCA). The U.S. devised tax law with global reach requires all foreign banks to submit full data on all American accounts with a balance of $50,000 or more. Financial institutions that are non-compliant risk being frozen out of U.S. markets and a 30 percent withholding tax on any activity taken by the bank, and even its customers. While FATCA was billed as an effort to expose overseas tax cheats, many honest Americans and…
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NACVA and the CTI are founded on excellence, superior quality, and the spirit of pioneering. We have a rich history of partnering with visionary leaders across all spectrums of the accounting and financial consulting professions regardless of affiliation with NACVA and the CTI. Simply put, we want the best of the best among our group of subject matter experts and leaders. We are thrilled to recognize this inaugural list of professionals for their accomplishments to the profession and their communities and for their contributions yet to come. Throughout 2014 you will get to know these rising stars through a…