The Pursuit of Equitable Relief, Separation of Liability, and/or Innocent Spouse Relief The consideration of innocent spouse relief, separation of liability, and equitable relief remedies are important to understand and consider for the purposes for which they were created. This article presents the different options and when one option may be more fitting than another and the relief accorded under each. The merging of two individuals’ lives into the union of marriage has familiar practices: shared checking accounts, title to the marital home, and the filing of a joint tax return are a few of the more common mergers. The…
-
-
We sometime make decisions that seem right, but in hindsight, we wonder what we were thinking at the time. Over committing is exhausting. In this article, Rod Burkert shares his thoughts on how to get back on track and focus on the main priorities. I don’t know about you, but sometimes I look at an event on my schedule and think: Why did I agree to do this/write that/be there? I’m sure it made sense at the time, but now—when I am trying to get something important done—I’ve got to do this! So how do you put a brake on…
-
In this article, the author shares with readers that a number of practitioners expect a slow 2022; this is a departure from the current work frenzy. He shares his advice regarding what to do in anticipation of that fear. I have been talking to many of my colleagues lately—mainly, those who specialize in tax purpose valuations. Collectively, they have been, and they are up to their a$$es in alligators—resulting from the ongoing influx of E/G work triggered first by the COVID-19 pandemic and then the change in Presidencies. Collectively, they expect they will be much less busy come 2022. Feast…
-
Avoiding the Chaos and Selecting the Proper Methodology Over the past 20 years, business valuation analysts (and the courts) have debated whether there is an S corporation premium vis-à-vis the C corporation. This debate has led to the profusion of models and confusion. Four predominant models currently in use include: the Fannon, Delaware MRI, Van Vleet’s SEAM, and Treharne Model. Each of these models makes a different assumption. As for the similarities and differences of the four models, James Hitcher in this September 30, 2021, VPS StraightTalk Series primarily focused on Van Vleet, Delaware MRI, and Treharne model. The webinar…
-
Part IV: Illustrative Examples Part I of this series discussed the conceptual foundations of the cost approach to intellectual property valuation. Part II described the generally accepted valuation methods within the cost approach to intellectual property valuation. Part III presented the practical measurement procedures in the application of the cost approach. In this final installment of this series, Part IV presents several illustrative examples of the application of the cost approach in several intellectual property valuation scenarios. [su_pullquote align=”right”] Cost Approach to Intellectual Property Valuation Part I: Conceptual Principles Cost Approach to Intellectual Property Valuation Part II: Valuation Methods Cost…
-
What to Ask for and Use? Most small businesses use the cash basis of accounting. Despite that practice, prospective clients will prepare their books in a variety of different ways that do not conform with the accounting cash basis. There are hybrid and accrual cash basis and the business valuation practitioner needs to recognize the differences between these forms of accounting. In this article, the author shares the importance of understanding each and what to do and ask for from the client to better understand the financial disclosures. Which should I ask for? Does it really matter? Isn’t each one…
-
Part III: Practical Procedures Valuation analysts are often called on to value intellectual property for various transaction, taxation, financial accounting, corporate planning, litigation, and other reasons. In this Part III of this series, the discussion focuses on the practical measurement procedures related to the application of the cost approach in the intellectual property valuation. [su_pullquote align=”right”] Cost Approach to Intellectual Property Valuation Part I: Conceptual Principles Cost Approach to Intellectual Property Valuation Part II: Valuation Methods[/su_pullquote] Introduction Valuation analysts (analysts) are often called on to value intellectual property for various transaction, taxation, financial accounting, corporate planning, litigation, and other reasons.…
-
A Conceptual Framework to Consider Real Estate Centered Business Enterprises (RECEs) commonly sell as real property going concerns with elements of real estate, personal property and a business enterprise component. Business appraisers face several challenges with these assignments due to the interdependence of the business with the other assets. Another key challenge for business appraisers with these types of assignments is relying on separately completed real estate appraisals that are frequently incorrectly developed based on an inappropriate premise of value. This article provides readers a conceptual framework to valuing these types of businesses. Real Estate Centered Business Enterprises (RECEs) commonly…
-
Part II: Valuation Methods Part I of this four-part discussion considered the conceptual foundations for applying the cost approach to value intellectual property (including patents, copyrights, trademarks, and trade secrets). Part II summarizes the generally accepted valuation methods within the cost approach. Introduction Part I of this four-part discussion considered the conceptual foundations for applying the cost approach to value intellectual property (including patents, copyrights, trademarks, and trade secrets). Part II summarizes the generally accepted valuation methods within the cost approach. Cost Approach Valuation Methods There are several generally accepted intellectual property valuation methods within the cost approach. Each of…
-
Why it Matters This article examines the major nonconformance issues the average valuator may face, where to find the information necessary to investigate, and how to make the adjustments to conform with GAAP. The adjustments discussed are not exhaustive but do cover the more common adjustments valuators should consider. While a valuation is not an audit, the valuation analyst must recognize material deviations from GAAP and understand how to make the necessary adjustments. Valuation principles require the financial statements used be prepared based on generally accepted accounting principles (GAAP) unless there is a different agreement by the parties to the…
-
Part I: Conceptual Principles This is a four-part article series. The articles and discussion focus on the conceptual principles and the practical applications of the cost approach in the development of intellectual property valuations. Part I of this discussion focuses on the conceptual principles that support the application of the cost approach to intellectual property valuation. Part II describes the generally accepted cost approach valuation methods. Part III describes the practical measurement procedures related to intellectual property cost metrics and obsolescence metrics. Part IV presents several illustrative examples of the application of the cost approach in hypothetical intellectual property valuation…
-
Not all referral opportunities pan out. And there are two reasons why. This article explains those two main reasons. I want that new client. I need that new client. I am perfect for that new client. I deserve that new client. Dang! Why didn’t I get that new client?! Unfortunately, not all referral opportunities pan out. And there are two reasons why. Reason #1: Your Referral Source Didn’t Refer You Ouch! Hinge Marketing asked referral sources to list the top three reasons “most likely to decrease the probability of referring a service provider.” The results: 52%—Absence of visible expertise 19%—No…
-
Center for Medicare & Medicaid Publishes Proposed and Final Rules on Medical Reimbursement Rates The U.S. government is the largest payor of medical costs, through Medicare and Medicaid, and consequently has a strong influence on physician reimbursement. The prevalence of these public payors in the healthcare marketplace often results in their acting as a price setter and being used as a benchmark for private reimbursement rates. Consequently, changes to Medicare and Medicaid payment rates are notable as they may indicate a shift in the greater healthcare reimbursement landscape. Over the summer, the Centers for Medicare & Medicaid Services (CMS) released…
-
Natural Disasters and Claims Submission Best Practices This article’s purpose is to alert practitioners to potential issues that may arise during the claims process as it relates to damages suffered from a catastrophic event, other than COVID-19, during the ‘pandemic economy. Readers need to be aware of and distinguish the two events when filing a claim. Because the influence of the ‘pandemic economy’ on businesses is ongoing, and in many instances specific to industries and geographic locations, practitioners need to be able to isolate the financial components of each and be prepared to articulate if and how the coronavirus impact…
-
From Beginning to End The authors of this article discuss what happens when credit card data is stolen and personal identifiable information is stolen. They recount how this information is used and sold on the dark web and the issues that arise when damages are claimed. The case of Target Corporation Data Security Breach Litigation, Attias et al. v. Carefirst, Inc., and Wawa provides context and insight on what must be proven and how damages are calculated. Ever ponder what happens when credit card data is stolen? I am not referring to the theft of your credit card from a…
-
Reasons for Failed Negotiations There are many reasons for failed negotiations. Emotion is often a reason that people cannot resolve their differences. When individuals are highly emotional, they lose the ability to think clearly and to fully evaluate the risks in continuing the controversy. Pride, ego, vengeance, and many other factors combine and contribute to creating negotiation roadblocks. Many of these factors have emotional and psychological connections. The focus of this article considers how these factors impact decision-making, and will provide new skills, review old ones, and assist with integrating techniques into a plan that may help find common ground.…
-
But Not the Cost of Debt? Determining the cost of equity can be quite interesting whereas determining the cost of debt is often boring. We may add items to the cost of equity—such as a size or company specific risk premium—that arguably are not included in the CAPM methodology used to determine the cost equity. But then we do not add these items to the cost of debt. Do only equity investors care about size and company specific risk premiums? Does not including these items in the cost of debt suggest they should not be included in the cost of…
-
Key Actions to Undertake to Increase the Price of a Company This article provides a brief overview covering what the author—a middle market investment banker—believes is the most worthwhile and impactful actions that anyone contemplating the sale of their business can take right now to set themselves up for success in a future transaction process. The author recommends that prospective sellers and their advisors focus on five critical steps, with the aim of having key points to negotiate the sale and commanding the highest selling price. Steps to Raise the Price of a Company Anyone seriously contemplating the sale of…
-
Six Months In Special Purpose Acquisition Companies (SPAC) have been a prime focus of the SEC over the last six months. On April 12, 2021, the SEC issued “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies” to highlight potential accounting implications and provide guidance on making the determination between classifying the warrants issued by SPACs as equity versus a liability. Below, the authors navigate through the valuation process of SPAC warrants and the frequent issues seen thus far in SPAC warrant valuations. Special Purpose Acquisition Companies (SPAC) have been a prime focus of…
-
Get Acquired for Millions—A Roadmap for Technology Services Providers to Maximize Company Value What should a technology service professional know to sell his or her company for millions. In this book review, Michael Pakter discusses Linda Rose’s Get Acquired for Millions—A Roadmap for Technology Services Providers to Maximize Company Value. Entrepreneurs aspiring to end up selling their businesses for millions should make business valuation their primary strategic imperative from start to finish. To quote Steven Covey, “Begin with the end in mind.” Those who begin to ask themselves “what is my business worth?” only when the time to sell arrives…