Connecticut Appellate Court Affirms Trial Court’s Decision Not to Tax-Affect Earnings In a dispute over the buyout of the minority shares in a family business, the Connecticut appellate court addressed several important valuation issues. Notably, the appellate court upheld the trial court’s decision not to tax-affect the company’s earnings in determining the fair value of the shares, even though both the pl ...

Expert Assignments and the Impact of COVID-19 COVID-19 has had a dramatic impact on the global economy. As the economic crisis deepened, the Wall Street Journal reported, “The nation’s bankruptcy industry is bracing for a wave of business collapses triggered by the coronavirus pandemic as its ranks have been thinned by a decade of economic growth.” Working on business bankruptcy assignments in 2020 will pre ...

Popular Plans to Incentivize and Retain Talent Employees and executives can get added compensation in addition to their salaries. In some cases, these benefits could exceed the salary. Most of these benefits are contractual and, where there is a discretionary element, it is usually awarded by the board of directors. This article provides a round up listing of the more popular benefits. Not included are stan ...

Highlights of the New Bankruptcy Chapter: Chapter 5 Many small businesses could not afford the processes in place under Chapter 11. The SRBA, signed into law in August 2019, created Chapter 5 and was intended to provide a “fresh start” to small business owners. This article highlights some of the key issues under the new law. On August 23, 2019, a relatively small, 22-page bill known as the Small Business R ...

with “Pinkcast” Daniel H. Pink is author of six provocative works about business and human behavior. His website contains videos and newsletters. In this article, Rod Burkert describes how Pinkcast changed the way he marketed, and provides six reasons why BVFLS professionals may want to consider Pinkcast as a resource. Do you struggle putting pen to paper … figuring out what to say in a 300–900-word dispatc ...

Highlights the “Good” and “Bad” Hindsight Debate Many predictions are doomed to fail whereas hindsight is undefeated. Predicting the future is very difficult due to the countless permutations that can occur. By contrast, anyone can observe what happened after the fact. Not surprisingly, it can be tempting to focus on the reliability of hindsight over the (typically) more relevant contemporaneous projections ...

to Convert Leads into New Business In this post, Dr. Frederiksen shares some thoughts on ways to use virtual marketing to increase visibility, communicate your expertise, and build engagement with prospects. In the age of COVID-19, these marketing techniques are essential to a firm’s survival. In my most recent post, I explained some key advantages of virtual marketing over more traditional approaches. In t ...

Time to Revisit this Tool If you think Monte Carlo simulations are too complex to use in business valuation, you are not alone. There are three main reasons valuators shy away from using Monte Carlo analysis: 1) they do not totally understand it, 2) it involves statistical analysis and most would prefer not to relive their college statistics class, and 3) it is difficult to explain, especially to a jury. A ...

Avoiding Trademark Infringement Sometimes you need to use your competitors' trademarks to sell your products or services. This is particularly true when you are selling, for example, replacement parts, and need to say that your replacements are compatible with the trademark owners’ products. It can also be important when providing services such as repair. If you repair BMW automobiles, you need to let other ...

and its Impact on Lost Profits Calculations These are challenging times. Financial experts are faced with economic uncertainty and differing projections from various sources as to what the “new normal” will look like. Regardless of the economic circumstances, financial experts are hired to estimate lost profits. These calculations must be made with reasonable certainty. But to be reasonably certain, proxima ...

Personal Damages Calculations and Exposure to COVID-19 Financial experts who, in the past, have been reluctant to take on personal injury economic damages as part of their practice should reconsider that decision today. Not only is the field growing and on the verge of a potentially huge boom driven by the COVID-19 crisis, there are plenty of resources to help you quickly get up to speed performing these ty ...

In a SPAC Merger Transaction The fair value of equity consideration issued in a merger involving a public company is generally calculated as the product of the quoted price for the individual equity instrument times the quantity issued (commonly referred to a “P times Q”). However, if the merger involves a special purpose acquisition company (SPAC), determining “P” can be subjective and may result in differ ...

Caused by the COVID-19 Pandemic Business leaders, tax practitioners, and attorneys are considering how to address the serious challenges that may arise from disruptions in commercial activities due to business closures, travel restrictions, and stay-at-home orders that were put in place in many countries around the world in order to reduce the spread of COVID-19. This is also impacting transfer pricing syst ...

and “Voodoo” Economic Forecasts? One of the issues facing the business valuation community as well as business owners is the newly created accounting metric called “EBITDAC”, which stands for Earnings Before Interests, Taxes, Depreciation, Amortization, and Coronavirus. This is a non-GAAP accounting metric used by some companies today to raise more debts from lending institutions by adjusting or recasting t ...

Here’s How to Land Them What is an aspirational client? How can valuation professionals find and engage them? In this article, Rod Burkert shares his insight and experience finding aspirational clients. Aspirational clients. Who are they? What steps does it take to land them? Why are they important to our practice growth? When we started our practices, we were happy with the clients we got because we needed ...

Marketing During COVID-19 and Beyond Over the past few months, COVID-19 has become a household word, and shelter-in-place orders have rocked the business world. Small wonder that the concept of virtual marketing and business development has jumped to center stage. Nearly overnight, thousands of professional services firms have begun scrambling to figure out how to replace the only marketing approach they ha ...

The Court Opens to Tax-Affecting In Estate of Jones, the court addressed the tax affecting issue along with several other issues discussed in the valuation world today, including the proper approach for valuing an operating timber business (income vs. asset-based), the reliability of management projections, and the appropriate discount for lack of marketability. For the first time in 20 years, a valuation e ...

Forensic engagements that involve determining lost profits or other economic damages often require a “time series” of economic and market data. When the lost profits or other economic damages engagement involves comparing international companies, multi-country economic data, and international market data, the challenges in locating meaningful data become especially difficult. In this article, the authors sh ...

Procedures and Bankruptcy Code Changes for CPAs and Consultants A business or individual facing financial distress can utilize three types of federal bankruptcies to attempt to resolve their financial difficulties. This article provides an overview of the differences and when each would be used. Keep in mind that bankruptcy is a legal proceeding and must be handled by an attorney. However, business and fina ...

Their Potential Impact on Valuing a Construction Contractor Construction claims may impact the value of a construction company. In this article, the author discusses the issues that arise and the methodologies that may impact the valuation. A construction claim is a demand made by the contractor to the owner for additional revenue for construction work performed on a construction project which is beyond the ...