The standard 10 stages In this first half of his two-part series, Robert F. Reilly summarizes six of the ten typical stages of any intangible asset analysis assignment. For purposes of this article, an intangible asset analysis may include a valuation, damages analysis, transfer price study, or other economic analysis. The business appraiser will typically consider these stages, or elements, before, during, ...

How we define tangible and intangible assets is paramount to accuracy and fairness in valuation. In this article, Dr. Carl Sheeler, responds to a September 9, 2013 concept paper authored by Rick Baumgardner, Chair of the Appraisal Practices Board of the Appraisal Foundation, titled “Valuation Issues in Separating Tangible and Intangible Assets.” ...

A rough ride This article examines recent state legislation in Georgia that requires entertainment production companies and their payroll providers to withhold state income tax on payments made to loan-out companies as a prerequisite to claiming tax credits. Peter Stathopoulos examines the difficult transition involved with this legislation that may spawn similar proposals in other states that host a large ...

Financially-sound companies can more easily obtain lines of credit at low interest rates, as well as more easily issue debt financing or issue bonds on better terms. Companies often take advantage of loopholes to present themselves as more profitable than they are. Most do it in a way that they’re not technically breaking the law, but ethics certainly come into question. When should you be concerned and whe ...

Things change because markets are not logical; markets are emotional. In an analysis featured on CNNMoney.com, Ben Horowitz lays out the specific challenges of raising capital and valuing startups in the current economic climate. In an eye-opening comparison, he looks at the price/earnings ratios (P/E) of all S&P 500 IT companies for the last 18 years. With this wide of a time span, one might expect som ...

Nothing simple about interest The takeaway from current research and practice within the forensic financial analyst profession is to stay current on methodology and to conduct your analysis in such a manner that can be explained and defended. ...

An alternate business valuation report format This article briefly describes an alternate format for business valuation (BV) reports that can make them more understandable. ...

Structured settlements are a useful tool, but not always advisable! There is plenty of acrimony in marital dissolutions. One way to possibly address the financial concerns of all and reduce acrimony is to consider the use of a structured settlement. A structured settlement replaces one lump payment with smaller payouts over time. It’s a concept frequently used in workers’ compensation or tort cases, but mor ...

In their recently released Beige Book, the Board of Governors of the Federal Reserve System break down the economic performance of the nation within seven business sectors across 12 metropolitan economic districts.  Prepared at the Federal Reserve Bank of San Francisco, the findings are based on all data collected on or before August 26, 2013.  Business sectors covered include consumer spending & touris ...

In the first installment of a two-part series, the AICPA reviews the most important developments affecting estate, gift and generation-skipping transfer (GST) tax and trust income tax over the last 12 months.  In the period from June 2012 through May 2013, the analysis covers legislative developments, rulings, pending cases, the American Taxpayer Relief Act of 2012 and inflation adjustments for 2013.  The s ...

Understanding this critical element in a buy-sell agreement Traditionally, business appraisers retained for buy-sell agreements are bound to perform their services within the specific value structure of the contract. When the valuation process is involved in such agreements, it’s essential for estate planners to understand the defining valuation elements involved, particularly the level of value. ...

Failure to make capital contributions did not void the operating agreement or reduce the ownership interest of non-complying partners In Grove v Brown, the Delaware Court of Chancery, relying on the unambiguous terms of a limited liability company (LLC) operating agreement, found that a member’s failure to make an initial capital contribution to a LLC did not affect that member’s ownership interest.   Furth ...

Garner v. Knoll, Inc.—the mathematics of a hypothetical liquidation analysis A preference payment is subject to recovery by the debtor’s estate. Having to return a “preference payment” may come as a surprise. In this case, the issue before the court is whether a creditor received far more than what it would have received under a Chapter 7 liquidation. The case illustrates the mathematics used in conducting ...

Value metrics and capital formation Robert Cimasi serves as chief executive officer of HEALTH CAPITAL CONSULTANTS (HCC). Mr. Cimasi’s firm is a nationally recognized healthcare financial and economic consulting agnecy headquartered in St. Louis, MO, serving clients in 49 states since 1993. He is author of a three-volume set that offers a comprehensive reference guide to the factors involved in consulting wi ...

  According to the US Bureau of Economic Analysis, “research and development” (R&D) are now considered a fixed investment. The report, released last month, contains GDP figures categorizing R&D with this distinction. R&D now joins software in a new category labeled “intellectual property products”. While some see the change as only affecting a small number of economists, others see the move as b ...

Valuing Nokia Siemens Networks Nokia Corporation is bound to look very different after Microsoft buys its devices division. When the initial purchase was announced, most in the industry were shocked. The bigger question is: How much will the remaining parts of the company be worth once the deal is done, and how should they be valued? Analysts from JP Morgan Cazenove provide a very interesting breakdown in a ...

Testing the high risk waters in today’s business environment The absence of a fraud risk management (FRM) program exposes a company to financial losses and legal liability if a fraud investigation is not properly handled and the employee is wrongfully discharged, or his or her privacy rights are violated. A FRM program addresses the above concerns and establishes controls every company should have to identi ...

Wave of boomers fuel business acquisition market This article examines the upswing in the business acquisition market as holdouts from 2009 and 2010 are freed up, as well as the increasing number of baby boomers looking to move into the next phase of life. ...

Working within the DLOM ambiguity This review examines the impact of volatility as a risk factor in the discount for lack of marketability (DLOM) and answers questions regarding the flexibility of adjustment periods. ...

Equity creditor appointment standards and lessons for hiring business valuation professionals from Kodak’s bankruptcy This article provides an overview of the Eastman Kodak bankruptcy case and focuses on the standard a bankruptcy court will use deciding whether to appoint an official equity creditors' committee. It also explains why the bankruptcy court granted Kodak’s motion in limine to exclude‒under Daub ...