When Using Guideline Transaction Data Income taxes play a major role in the pricing and structure of business transactions because income tax consequences associated with the sale or purchase of a business can substantially reduce the seller’s net proceeds and/or lower the net cost of a purchased ownership interest to the buyer. Because of this issue, it seems appropriate to assume that actual transactions ...

Background and Objectives of the Job Aid (Part 1 of 3) The release of this series of Job Aids has been hailed by many as a new era of communication and understanding between the Internal Revenue Service, taxpayers, and practitioners. However, in the opinion of this author, and others, releasing these additional documents in such a formal manner seems to be an attempt to influence practitioner behaviors in s ...

The annual Southern Capital Forum sponsored by Mercer Capital brought to light several interesting comments.  Matthew Crow, President of Mercer Capital, looks at some of these dealing with stretched valuations. To read more about the results of this report in the Mercer Capital's Financial Reporting Blog, click: Valuation concerns mark Southern Capital Forum: Are VC trends the canary in the RIA coal mine?  ...

The IRS issues long-awaited rules on taxation of gifts and bequests from covered expatriates.  Sally P. Schreiber, Journal of Accountancy senior editor, discusses the recently proposed regulations and what’s to be expected. To find out more on the AICPA’s article, click: Proposed rules govern taxation of gifts and bequests from covered expatriates. ...

Push past estate planning fatigue and build a better relationship with your clients and their descendants.  Many advisors find difficulty and obstacles when guiding their clients through this process.  Kimberly Bernatz, Senior Vice President and Director, Wealth Management Advisory Services, First American Trust, FSB, walks you through some important steps to keep in mind when developing an estate plan.  To ...

Reduce Your Stress and Those Around You This article addresses time management, avoiding time wasters, prioritizing what is important to you, setting goals and writing them down, and looking at life holistically to help bring peace to our otherwise turbulent hectic life style. ...

Thoughts From the Field on Whether to Cite Legal Precedent in a Report Should a valuation analyst include legal citations in a report? Calculation engagement? In this article, Peter Agrapides, MBA, CVA, shares his thoughts on that question. ...

Not all Social Networks Are Created Equal Has your firm embraced social media? Be ready! The days of ignoring social media are long gone. Professional services firms looking to accelerate their growth need to embrace social media and dedicate the resources needed to create a strategy, implement it, and track it. In this article, the author presents research on the impact and value of social media to profess ...

Demonstrate Leadership to Get Ahead Training leaders means developing a partnership between the employer and employees. This involves both bottom line and business metrics, as well as behavioral and team building skills. The issues related to soft skills such as behavioral and team-building skills are explored in depth in Mike Gregory’s book, The Servant Manager, 203 tips from the best places to work in Ame ...

Tax Controversy Insights In matters argued before the U.S. Tax Court, valuation professionals are frequently asked to provide opinions related to the value of closely held businesses and of fractional ownership interests in closely held businesses. This discussion relates to a recent appeal of a U.S. Tax Court decision involving such valuation issues. The case in question is Natale B. Giustina v. Commission ...

Conflict Resolution in the Business Valuation World Conflicts exist with clients, co-workers, and with the other side on valuation issues. Most valuation cases settle well before litigation. This article focuses on steps that can be taken to enhance your perspective and work with those you find difficult to communicate with in any setting. ...

Transition Period Payments After a Business Acquisition Owner’s of closely held businesses will usually be required to remain active in the business after the same is sold. This article examines two key questions related to such post-transaction transition payments: (1) how much should the buyer pay to the sellers for these transition period services, and (2) how should these transition period payments be s ...

In Appraising Outpatient Enterprises Healthcare related outpatient enterprises provide services that do not require hospital admission and may be performed outside the premises of a hospital. Similar to valuation of any business, valuations of outpatient enterprises should include consideration of the three general approaches to valuation (i.e., the income approach, the market approach, and the asset/cost a ...

Recognizing How a Position-Based Perspective Limits Communication The topic of communication, diversity, and perspective may initially seem like basic common sense. However, exploring how you and others look at things through our own lenses based on personal experiences shapes how we interact with others. In this article, the author shares his views on what limits communication and what it takes to effectiv ...

Understanding the Language of Chapter 11 Cramdown This article will examine terms of art used in a Chapter 11 cramdown. These terms go hand in hand during a contested or cramdown hearing. The court will work to assure that the bankruptcy definition of these terms is met before confirming a plan. Any expert expecting to testify at a cramdown hearing should have a working knowledge of their meaning. ...

While the vast majority of jurisdictions have moved away from the new business rule and adopted the modern new business rule, by which new/unestablished businesses can recover damages, such adoption does not diminish the requirements under the reasonable certainty standard. Given the lack of historical financial performance data and under the lens of the reasonable certainty standard, estimates of lost prof ...

For those of us who spent much of our careers in the old professional services marketplace, it’s all too easy to think of our firm websites as an afterthought–something you have to have in today’s world, but not a priority. A growing body of research demonstrates, however, that this couldn’t be further from the truth. This article looks at recent research on the matter and suggests that a website may well b ...

An In-Depth Series on Healthcare Valuation, Part 2 of 4 This article focuses on utilizing an income approach to value outpatient enterprises, while subsequent articles in this topic series will address the use of a market approach and an asset/cost approach to value outpatient enterprises. ...

Moving from Facts to Opinion? ASC 820 under US GAAP and IFRS 13 issued by IASB provide a principal based framework for fair value measurement. Though fair value measurement guidance in US GAAP and IFRS are substantially in the same line, some minor differences exist. This article discusses the IFRS 13 and challenges in its implementation. ...

An In-Depth Series on Healthcare Valuation This first installment will discuss Fair Market Value, the most prevalent standard of value in the healthcare industry, and why this is the required standard of value for most healthcare transactions. This article will also discuss the premise of value, which further defines the circumstances of the transaction, and how to determine which methods may be applicable ...