Dispute Defensible Best Practices, Part 3 of a three-part series In this third part, the last of a three part series, the author stresses that in order for a policy “review” or annual statement to rise to the level of a true “audit”, it needs to incorporate all elements of the above criteria. It needs to do this in a format providing actionable information. Without actionable information, a “review” cannot ...

Key performance metrics for BDCs can help provide insight to the upcoming valuation marks.  Travis Harms, leading Mercer Capital’s Financial Reporting Valuation Group, looks at fair value measurement in relation to credit spreads and what may be expected in the upcoming portfolio marks. Read more about the results of this report in the Mercer Capital's Financial Reporting article, Portfolio Marks: 2Q15 Outl ...

How can your firm effectively convey its value to clients?  Carl Peterson, CPA, proposes three ways firms can enhance their competitive advantage for you, your firm, your clients, and your prospects. Find out more in the American Institute of CPAs® article, Three Steps to Enhancing Your Competitive Advantage. ...

The Growing Importance of Social Media and Marketing Expertise Referrals are an old standard—perhaps the old standard—for growing your practice. For the better part of the last century, firms have worked under a simple assumption: do good work for your clients, network with referral sources such as attorneys and CPAs, and you will win new business through referrals. In this article, the author discusses the ...

Moral Victory: Plaintiff Wins the Battle (Causation) But Loses the War (Damages) AIG collapsed in the wake of Lehman’s bankruptcy filing and required a government bailout in order to avoid the same fate as Lehman. The plaintiff (AIG’s shareholders) contended that they were harmed by the relatively harsh bailout terms that were imposed on AIG but no other bailout recipients. The defendant (U.S. government) c ...

What is the effect of goodwill impairment charges when comparing large cap stocks versus small cap stocks?  Robert Richardson, a financial analyst with Mercer Capital, examines if higher equity markets have rendered impairment a thing of the past. Find out more in the Mercer Capital's Financial Reporting article, Small Cap Goodwill Impairments on the Rise. This article is republished from Mercer Capital's F ...

Imagine, building your firms profits while also increasing client satisfaction.  There may be some psychology to this.  Consultant Ron Baker explains to Chris Baysden (for the AICPA) how offering different pricing options can help firms do just that in this Q&A. Find out more in the Journal of Accountancy® article, Q&A: To boost revenue, try offering these pricing options. ...

The theme of NACVA and the CTI’s 2015 Annual Consultants' Conference was: Cultivate, Venture, and Achieve.  It did not disappoint. On June 21, 2015, NACVA released its updated professional standards.  Mark Hanson, Mark Kucik, and Carl Sheeler unveiled the updated standards, which become effective August 1, 2015.  The new standards include: Articles VI, Business Valuation Review, and Article VII, Review Enga ...

If It’s Ready Scott Bulloch, an exit planning professional and advisor, shares his views on why now companies with EBITDA of $1,000,000 or more are attractive to private equity. While there are companies that will meet the minimal thresholds, not all are ready. Is your company or that of your client’s ready for private equity? ...

Avoiding Surprises Confidentiality is a cornerstone of mediation. But, how “confidential” is mediation? In this article, Nancy Yeend, a nationally recognized mediator, discusses the impact of the Uniform Mediation Act (UMA) and the various exceptions and levels of protection afforded to mediators and parties to a mediation. ...

In 2014, a study by Chicago United documented a lack of diversity in leadership roles within American companies noting that more than 75 percent of executives are white.  This fact should be of concern to big businesses because diversity in leadership roles has real benefits including better customer relationships, increased employee creativity, and improved quality of work.  In this article, by Peter Gomez ...

A recent survey of investment professionals in the CFA Institute reports investor concerns about the use of different accounting standards and rules for SMEs under IFRS and private companies under GAAP.  Karolina Grabowicz, a financial analyst with Mercer Capital, reports how the use of different standards adds complexity and costs to financial reporting.  Issues also arise over the loss of information due ...

Disputes Defensible Best Practices (Part 2 in a 3-Part Series) In this second part of a three part series, the author looks at examples of how potential catastrophes have been avoided or reversed by employing a comprehensive policy audit. He then focuses on what is needed to make a policy audit dispute defensible. ...

Practice Pointers from the Field How can a credentialed valuation analyst compete with a low-cost provider of valuation services performed by a professional lacking a business valuation credential? In this article, the author shares how he has succeeded conveying the value of using a credentialed and qualified business appraiser. ...

Investors, analysts, and pundits remain highly optimistic on the Financial Technology (“FinTech”) sector driven by factors such as technology advancement and evolution, evolving consumer behavior and expectations for digital delivery of financial services, and regulatory response to the financial crisis.  Mercer Capital examines valuation multiples within the FinTech industry over time to see whether public ...

High account balances is an often overlooked risk related to sequence of returns especially for investors within five years of their retirement.  Ron Surz, target-date fund expert and ThinkAdvisor contributor, warns that most target-date investors are in grave peril. Read more about why sequence of returns is so risky in this article at ThinkAdvisor. ...

In Economic Substance Analyses Valuation analysts and other financial advisers are often called on to perform economic substance analyses in federal income tax challenges. In these cases, the Internal Revenue Service challenges a tax deduction or loss related to a taxpayer transaction by applying the so-called economic substance doctrine. This doctrine allows the Service to disallow a taxpayer transaction i ...

Forecasting “But-For” Revenue for Lost Profits In this article, the author provides a brief discussion of each major approach considered in an economic damages engagement and then discusses circumstances in which multivariate analysis could provide the greatest benefit in formulating a comprehensive damage model. ...

This blog discusses the four-step process for providing fair value marks for venture capital fund investments in pre-public companies: 1) examining the most recent financing round economics, 2) adjusting valuation inputs to the measurement date, 3) measuring fair value, and 4) reconciling  and testing for reasonableness.   Sujan Rajbhandary, vice president in Mercer Capital’s Financial Reporting Valuation G ...

Scenario planning, an effective decision-making tool under uncertainty, is underutilized by organizations primarily due to deep-seated cognitive biases that exist.  Drew Erdmann, Bernardo Sichel, and Luk Yeung of McKinsey & Company tell managers how to address these common biases and provide guidance along with a practice cheat sheet on the dos and don’ts of scenario planning. Read more on scenario plan ...