The financial neutral plays an important role in the collaborative law process One of the team members in the collaborative law process of divorce is the financial neutral. This article explains the role of the financial neutral as an impartial expert.
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An overview of the Federal Rules of Evidence, Federal Rules of Civil Procedure and leading pre- and post-Daubert cases In this third part of a four-part series, the focus turns to the rules of evidence and standards used to admit the testimony of expert witnesses. While a minority of jurisdictions follows the Frye standard, the majority has adopted the Daubert standard. Objective testimony is critical, which means the expert must not merely accept representations from the client.
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According to Bloomberg News, financial regulators have reported that new measures on the Dodd-Frank Act should be mostly complete by the end of 2013. The law, created in 2010, was designed to prevent a repeat of the 2008 worldwide credit crisis. Among the new rules are tougher leverage requirements for eight of the nation’s largest banks, a risk-based capital surcharge for systemically important banks and the Volcker rule to ban proprietary trading by banks. FDIC Chairman, Martin Gruenberg has stated that he’s seeking a Volcker rule that ensures the banks’ ability to perform underwriting “market-making” functions in less liquid markets.…
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Jumpstarting a career as a litigation consultant and expert witness Getting started as a litigation consultant or expert witness takes time. The service is cyclical, and the first engagement may be the last engagement. You’ll need to be well-prepared and knowledgeable in each field.
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Will the valuation report prepared by the non-accredited CPA be admitted? The author was recently involved in an Oklahoma domestic relations case where the opposing expert contended he did not have to abide by AICPA valuation standards, reporting or otherwise, since he was not a member of the organization. This article summarizes how this issue was handled by the Oklahoma judge.
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A proactive approach pays off for selling shareholders A business valuation analyst has the training, valuation skills, and experience to provide meaningful feedback to owners seeking to exit their businesses. When and how to conduct the pre-sale valuation is crucial to maximizing profit potential. This article will provide insight into using your valuation skills to help prepare a business for sale.
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Professional accounting valuation accrediting standards for effective litigation In this second part of his four-part series, Mark Shirley, CPA/ABV, CVA, MAFF, CFE, focuses on complicated professional standards. Here, the article examines AICPA’s Code of Professional Conduct and Statement on Standards for Consulting Services (SSCS), which sets forth the scope and limitations of practice. While the AICPA has not promulgated litigation reporting standards, it has incorporated a judicial exception in SSVS and issued at least two non-authoritative Consulting Services Practice Aids addressing effective litigation services.
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Senators, Bob Corker (R-TN) and Mark Warner (D-VA) introduced a bill on June 25th that would eliminate government-sponsored Freddie Mac and Fannie Mae. Over a five-year phase out, the institutions would be replaced by a new government reinsurer, a Federal Mortgage Insurance Corp (FMIC). Originally reported by National Mortgage News, the structure of the FMIC would be similar to the Federal Deposit Insurance Corp, collecting premiums from industry participants and maintaining an insurance fund. Only after a “substantial amount” of private capital had been exhausted would its backing kick in. FMIC would cover a greater share of losses during “unusual…
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REIT stocks fell sharply in the second quarter, ranging between 11 and 15 percent. Originally reported by the Wall Street Journal, the Dow Jones Equity All REIT index posted a 2 percent negative return in the second quarter. The index hasn’t reported a performance that weak since the third quarter of 2011. Analysts are saying REITs took a dive because investors are nervous about rising interest rates stalling a potential recovery in the commercial real estate sector. Even so, they’re hopeful that REITs will make a comeback by the end of the year. For more details please visit the Appraisal…
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Suggested benchmark analysis to assess the reasonableness of the cost of equity In the February/March 2013 issue of the Financial Valuation & Litigation Expert (FVLE), Issue 41, Jim Hitchner authored “How to ‘Rig’ a Valuation: The Discount Rate.” This is the first of a two-part FVLE series. The article provides suggested guidance to unmask the intentional “rig.”
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An ethical duty to ourselves, the profession, and our clients Business appraisers owe each other, the profession, and clients a duty to behave ethically and set aside our own biases and self-interest.
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How much is that receivable really worth? Valuing receivables in a medical practice is never simply a matter of analyzing an aged receivables report. A number of factors must be considered to accurately value what could easily be the largest asset of the practice.
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Procedural phases in litigation: the role of the expert from drafting of the complaint through trial In this first part of a four-part series titled “Providing Effective Litigation Services” Mark Shirley, CPA/ABV, CVA, MAFF, CFE presents an overview of the phases in a civil case, from filing of the complaint through trial. An effective expert is a professional that understands the procedure, rules, his or her role and has the knowledge to provide the trier of fact, an informed opinion and ability to anticipate challenges.
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“Bank of America spokesman Terry Francisco told Bloomberg that the lender’s program prevents paperwork errors from delaying loan applications and that the overseas completeness checks don’t replace in-depth reviews done by licensed U.S. staff.” According to the Appraisal Institute and Bloomberg, Bank of America (BofA) has opened an office in Bangalore, India to deal specifically with reviewing valuation reports. It’s been said that the move is part of an effort by BofA to increase its share of the mortgage market and lower costs. Earlier this year, BofA eliminated nearly 5 percent of all positions at its Plano, Texas LandSafe appraisal…
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Book Review
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Fractional interest discounts allowed In Estate of Elkins v. Commissioner, the U.S. Tax Court sides with petitioners holding they were entitled to a ten percent discount from pro rata fair market value with respect to a decedent’s interest in various works of art. In Fancher v. Prudhome, the Louisiana Court of Appeals upholds a trial court’s determination that using the Income Approach to value a withdrawing member’s share in an LLC was not applicable since future cash flow could not be assumed and the withdrawing member provided the majority of the company’s business.
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How to apply the landmark cases Delaware MRI (2007) and Bernier (2012) Eric J. Barr, CPA/ABV/CFF, CVA, CFE, analyzes two landmark court decisions—Delaware MRI and Bernier—and offers more clarity on the proper way to value an ownership interest in a pass-through entity under the fair market standard of value.
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Five key questions to determine whether it’s time to switch to a digital system At many firms, practice management software is often referred to as the “last frontier”, according to Matt Jagst, Director of Enterprise Product Management in the tax & accounting business of Thomson Reuters. Most firms manage to get by with outdated systems and processes. Switching to digital software that integrates time, billing, workload management and other functions into one application not only shores up client relationships, but puts real money in one’s pocket.
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Important factors to consider in making tax adjustments to pass-through income Damodaran recently wrote about the potential devaluation of dividend-paying stocks if the preferred dividend tax rate were to climb back up to the ordinary rate. This could inspire valuation experts to make a tax adjustment reducing untaxed Pass-Through Entity (PTE) income to equate it with corporately taxed income that qualifies for tax preference at the shareholder level. Before making this tax adjustment, the valuation expert should consider several factors.
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Understanding EBITDA applications is crucial to accurate buyout values. This analysis examines EBIDTA as an overused metric that does not represent real economic profit. According to the author, eight subtractions are required to consistently and accurately determine true profit values.