In the early days of the scandal surrounding LA Clippers owner, Donald Sterling, certain terms of his punishment by the NBA were a given. What no one was sure of was whether or not he would be forced to sell the team. As speculation turned into fact, it seemed as if valuation estimates for the team were coming out of the woodwork. Some said the team price tag could go as high as $1 billion. Earlier i ...

  Netflix is the latest company to join a petition asking the Federal Communications Commission (FCC) to deny the pending $45 billion Comcast / Time Warner merger. In a 256-page report, Netflix details how the merger will give the new entity too much control over the internet, and that this new power will enable it to stifle online video distributors that it sees as competition. Comcast continues to ar ...

Analyze early and avoid earnings surprises The purchase price allocation (PPA) process is often treated as an afterthought in mergers and acquisitions (M&A). Thinking about PPA can help guide a deal to a more predictable conclusion. In the most rewarding deals, a prompt PPA process helps acquirers analyze, from a financial reporting point of view, the primary drivers or intangible values associated with ...

The impact on shareholder value Knowing the value of a business and delivering real value to a client company entails far more than using EBITDA multiples or going along with a rule of thumb to keep the peace. As professionals, valuators must be far more rigorous in their engagements, and focus on delivering value. The obligation to identify, measure, manage, and mitigate the risks are their responsibility. ...

  Among many legal challenges to the validity of the Affordable Care Act (ACA), is Halbig vs. Burwell. The challenge concerns a passage in the statute, when literally read as worded, makes federal tax credits for insurance programs available only to those enrollees in states that have created a state-designed and operated healthcare exchange. Read as it currently exists, the statute does not allow for ...

Fair value litigation and more The Delaware Chancery Court is considered one of the pre-eminent U.S. courts when it comes to business valuation and governance issues. This article reviews some recent court decisions pertinent to valuation practitioners and which will be discussed in more detail in NACVA’s Federal and State Case Law Update this fall. ...

  It was a shock to most people when the news hit that actor and comedian, Robin Williams, had suddenly passed away earlier this month at the age of 63. While most were aware of Mr. Williams’ hard-won 20-year sobriety milestone, what they didn’t know was the financial struggle he was facing in recent years. Forbes.com takes a respectful and detailed look at the estate planning of Mr. Williams, and show ...

  Now that we’re six years into the Great Recession, financial experts tell us that the stock market is booming, and the economy is once again robust. Strangely, the vast majority of Americans aren’t sharing in this so-called recovery and the benefits of it are virtually non-existent, unless you look at the top 0.1% of wage-earners in the country, namely the CEOs of major corporations. Profitability an ...

Approaches and Methods Used to Realize Income from Licensing IP Assets This article discusses valuation topics related to a subset of intangible assets which are most applicable to healthcare businesses. Business valuation professionals are often engaged to value specific intangible assets, either as part of a detailed business valuation or after a transaction has been completed. When valuing healthcare-ori ...

What This Means for Appraisers In a new twist involving litigation that impacts valuation analysts, on June 11, 2014, the Fifth Circuit Court of Appeals upheld the Tax Court’s valuation of a historic preservation façade conservation easement, but vacated the Tax Court’s imposition of a gross undervaluation penalty. The latest ruling, as Joe Brophy explains, raises a host of new issues. ...

  In spite of the current economic climate, a recent survey from the American Institute of CPAs (AICPA) showed that 54 percent of valuation professionals expected a 10 to 50 percent increase in the demand for their services over the next two to five years. These results are part of the 2014 AICPA Survey on International Trends in Forensic and Valuation Services. Forensic experts were even more optimist ...

  Nathan J. Mueller embezzled $8.5 million in barely four years from financial giant, ING through a series of corporate incompetence, “happy” accidents and missteps inside the company. His case is unique in the amount of money he stole and the length of time it went undetected. The breach of controls at ING was astonishing, but not nearly as incredible as hearing Mueller describe how easy it was in his ...

Know your data! Understanding the data that is applied in an analysis is important. Data that relies on standard industrial classification (SIC) codes can be misleading for industries that have changed—or did not exist—in 1987. As business models and industries evolve, it pays, as Bob Bridges explains in this article, to do a closer analysis. ...

Handling lawyers who coax you to work from their summary of the evidence Expert witnesses have an ethical responsibility, as well as a business imperative, to ensure they review the actual evidence that supports their analyses. Because expert witness testimony can make or break litigation outcomes, consultants cannot risk having their testimony excluded by the trial judge or discredited by the jury. ...

  The Financial Accounting Standards Board (FASB) has issued two standards updates with the intention of simplifying the measurement of inventory and eliminating the requirement for extraordinary items. Inventory (Topic 330): Simplifying the Measurement of Inventory would eliminate existing requirements to consider the replacement cost of inventory and the net realizable value of inventory less an appr ...

  Eventually, everyone who works with or around money professionally comes across a particular transaction that just doesn’t look right. Lots of these eyebrow raisers turn out to be false alarms, and some even have odd, albeit legitimate and legal explanations. Still, there are those that defy explanation of any kind. If you’re not in the business of looking for fraud on a daily basis, will you be able ...

Three key elements of fraud risk assessment Organizations that have not performed a fraud risk assessment may be two-thirds more likely to suffer a fraud-related event, states KPMG-endowed fraud and forensic accounting professor Larry Crumbley. Learn the three key elements that a company’s fraud risk assessment should address. ...

The valuation of customer relationships can be somewhat of a gray area for valuators. In many cases, the common valuation methodologies don’t apply, and the professional neglects to consider whether the determined value is consistent with a market participant’s perspective. While it’s become routine to assume customer relationships are a primary asset, this is not the case across all industries. In a short, ...

  The PCAOB recently issued Auditing Standard (AS) No. 18, Related Parties to strengthen auditor performance in the high-risk areas of significant unusual transactions and financial relationships, and transactions with executive officers. The change comes as the result of an internal review where the PCAOB felt the existing protocol did not contain sufficient procedures and was not properly risk-based. ...

Calculation engagements require development standards A proper calculation engagement requires planning, mutually agreed upon procedures, and adherence to professional standards. Otherwise, the valuation analyst and firm risk damaging their good name and reputation. ...