Applicable to Real Estate Holding Companies (Part II of II) In this second of a two-part series published in QuickRead August 01, 2019, the author discusses valuation discounts applicable to real estate holding companies and the incremental adjustments in the valuation of partial, non-controlling interests. After discussing the application of a minority discount or discount for lack of control (DLOC) in the last issue of Real Estate Perspectives, I will now turn to discussing the next incremental adjustment in the valuation of partial, non-controlling interests in entities holding real estate as their primary and most valuable asset. In this article,…
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Regulatory Issues (Part IV of V) As discussed in the first installment of this five-part series, rural health clinics (RHCs) are statutorily-created entities, established via the Rural Health Clinic Service Act of 1977. These providers face a range of federal and state legal and regulatory constraints, which affect their formation, operation, and transactions. This installment will discuss two important regulatory issues affecting RHCs: licensure requirements, and fraud and abuse law compliance. As discussed in the first installment of this five-part series, rural health clinics (RHCs) are statutorily-created entities, established via the Rural Health Clinic Service Act of 1977.[i] These providers…
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How to Avoid Romance of the Deal through Cold-Hearted Diligence This paper attempts to address these issues while presenting summary critical considerations that can and do mitigate the likelihood of unintended consequences and deals that fail to deliver. Specifically, it will speak to how advisors and buyers can verify and substantiate the most critical and yet intangible value drivers in a deal. Recently, private equity has been in the news again. Roughly one month ago, Elizabeth Warren announced new proposed legislation—the Wall Street Looting Act—intended to curb “useless speculation,” encourage “economic patriotism,” while targeting “vampires” intent on “bleeding companies dry”.…
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Reimbursement Environment (Part III of V) The U.S. government is the largest payor of medical costs, through Medicare and Medicaid, and has a strong influence on healthcare reimbursement. In 2017, Medicare and Medicaid accounted for an estimated $705.9 billion and $581.9 billion in healthcare spending, respectively. 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. This is particularly true for RHCs, which tend to serve a disproportionately large Medicare population. This third installment in the five-part series on RHCs will…
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An Appraiser in Court This is a review of Henry J. Wise’s, MAI, CBA, BVAL, CRE (Retired) recently released book, It’s Only an Opinion: An Appraiser in Court. In this book, comprised of 23 chapters, Mr. Wise is not only humorous but also insightful. He shares several nuggets from his 35-years of experience testifying in court on real estate controversies. He offers valuable information to business appraisers, real estate attorneys, and real property appraisers. This is a review of Henry J. Wise’s, MAI, CBA, BVAL, CRE (Retired), recently released book, It’s Only an Opinion: An Appraiser in Court. In this…
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Modern New Business Rule and How it Has Been Applied by the Courts Earlier this year, the author published two articles that appeared in QuickRead discussing calculating lost profits and defense responses for lost profits calculations in cases falling under the modern new business rule. The foundation for the article on defense strategies was an article published by Victor Goldberg. Following publication, the author was contacted by Mr. Goldberg, who recommended additional reading on this topic. That has led to this article. Under the new business rule, a new or unestablished business could not recover lost profits. This rule was…
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For Rural Health Clinics Competition (Part II of V) As discussed in the first installment of this five-part series regarding Rural Health Clinics (RHCs), the significant proportion of RHCs operating at a loss has led to an overall reduction in the number of RHCs. Despite this decrease, the demand for RHCs continues to rise, limiting access to care for patients in rural communities. This second installment will review the competitive environment of RHCs. As discussed in the first installment of this five-part series regarding Rural Health Clinics (RHCs), the significant proportion of RHCs operating at a loss has led to…
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Establish Yourself as a Sought-after Speaker Public speaking offers a range of opportunities—from professional growth, to promotion of you and your business, to breathing new life into your existing network. In addition, by doing a little preparation and research, you will find many excellent opportunities within your reach. In this article, the author helps the reader learn how to find the perfect audience for their expertise—and lay groundwork for speaking engagements that will help the expert and their company. Public speaking offers a range of opportunities—from professional growth, to promotion of you and your business, to breathing new life into…
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Applicable to Real Estate Holding Companies (Part I of II) In this two-part series, the author discusses real estate holding companies and describes the use of minority discounts (also known as the discount for lack of control [DLOC]) in the valuation of partial, non-controlling interests in entities holding real estate as their primary and most valuable asset. Part II will address the use of the discount for lack of marketability (DLOM) and certain other discounts applicable to interests in real estate holding companies. [su_pullquote align=”right”]Resources: Discounts for Lack of Marketability (DLOM) Workshop Advanced Valuation: Applications and Models Workshop How and…
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for Rural Health Clinics (Part I of V) The first of a five-part series where the authors describe the issues encountered valuing rural health care clinics. This first article discusses fair market value considerations for rural health clinics. Introduction Rural health clinics (RHCs) are specially certified entities that were created in order to increase access to primary care services for patients located in rural communities.[1] RHCs were established via the Rural Health Clinic Service Act of 1977, which law was promulgated to address the increasing shortage of healthcare services in rural areas.[2] These clinics are specially licensed healthcare organizations through…
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Selecting a Mediator is More Important Than Ever, Or? Mediation is the primary case management device used by the courts to resolve disputes, and the mediation process is frequently included in the dispute resolution section of most contracts. In some situations, mediation is even mandatory. What is interesting to note is that there are no uniform, national standards for training or regulating mediators. Some courts have standards for mediators on their rosters, but private practice mediators are virtually unregulated. Unfortunately, mediation has not met the test of a true profession. In this article, the author shares questions to consider asking…
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A Neutral Approach to Unimpeachable Standards C. Zachary Meyers, CPA. CVA, the author of this article, is NACVA’s Standards Board (SDB) Chair. The SDB was formed in 2016. The SDB’s purpose is to promulgate NACVA’s Standards, including the development of interpretations, amendments, restatements, and new releases of NACVA’s Standards as deemed necessary and prudent. While being able to influence the very rule governing one’s profession is an astute honor, the most rewarding role performed by the SDB is that of responding to questions that a member has asked or issue they are dealing with. This article discusses how standards must…
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Using Forensic Accounting Valuing the small business is how most valuators earn their living. These small businesses pose as much issues to valuation professionals as they do for tax, accounting, and legal professionals by providing these entities with advice. The issues are wide-ranging, and the purpose of this article is not to patronize small business owners; rather, the purpose of this article is to discuss the challenges we in the valuation community face when valuing small businesses and how forensic accounting techniques can help. [su_pullquote align=”right”]Resources: Forensic Accounting Academy Forensic Accounting Specialty Webinars Forensic Accounting Techniques in Business Appraisals Financial…
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The Limits Applied to Public and Private Companies The Tax Cuts and Jobs Act (TCJA) made important changes to Section 162(m) of the Internal Revenue Code. That section limits a publicly held corporation’s tax deduction for compensation paid to each covered employee to a maximum of $1,000,000 per year. A corporation is publicly held if it has issued securities required to be registered under Section 12 of the Securities Exchange Act of 1934. Under TCJA, Section 162(m) also applies to private companies that file reports under section 15(d) of the Exchange Act. The Tax Cuts and Jobs Act (TCJA) made…
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in Not-for-Profit Entities There is an established body of knowledge that addresses economic damages in connection with for-profit organizations, but little about how these concepts apply to not-for-profit organizations. In this article, the author sets forth how those concepts apply to charitable organizations. “You will be much more in control, if you realize how much you are not in control.”―Benjamin Graham, The Intelligent Investor Valuation experts deal with a variety of engagements when it comes to economic damages, which may include loss of profits, earnings (past or future), damage to property, or loss of business value. Most of literature and…
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A Discussion of Rover Pipeline, LLC v. 10.55 Acres of Land, More or Less, in Ashland County, Ohio, et al. “In God we trust. All others must bring data.” This famous saying has been attributed to various people, but it implies that when data is presented, the conclusion can be trusted. However, the Ohio District Court’s decision in Rover Pipeline, LLC v. 10.55 Acres of Land, More or Less, in Ashland County, Ohio, et al., demonstrates that data is only trustworthy if it is understood and applied correctly. The case, in which the expert’s valuation report was discarded due in…
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Beyond Keyword Placement—An Illustration for Search Engines to Find You In previous QuickRead articles, the author discussed the role blogging can play when marketing a firm’s services. When relevant articles are written and posted on a website, those articles can be found by prospects who are looking to solve a business challenge. But to ensure that blog posts are discovered, one needs to optimize them by adding keywords that prospects are searching for on search engines like Google. This process is discussed here. In previous articles, we discussed the role blogging can play when marketing your firm’s services. When relevant…
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A Forensic Accountant’s Process The purpose of this article is to explain how forensic accountants look at the big picture, both financially and by understanding past behaviors, to uncover items that may help you or your client. The author shares that some of his biggest “wins” in fraud investigations started with broad allegations; however, the techniques used to identify and quantify these allegations were what really lead the author to success. [su_pullquote align=”right”]Resources: Forensic Accounting Academy© Forensic Accounting Specialty Webinars Fraud Deterrence And Fraud Detection Introduction To Fraud Risk Management[/su_pullquote] I have conducted hundreds of investigations involving allegations of fraud…
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Understand the Cyber Security Threat Landscape and Threats to the Accounting Industry Do you feel like your firm’s data is safe? Do you feel like your client’s sensitive information is secure? Do you sleep each night feeling secure that you will not be hit by a data breach? If you answered yes to all three of those questions, it is time to wake up to the real risks you are faced with. You need to make sure to read the rest of this article and understand the real cyber threats you are faced with every single day when it comes…
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The Role of the Expert in 21st Century Dispute Resolution—A Recovering Judge’s Perspective As technology evolves, the role of the expert and the interplay between experts and the judiciary will evolve. This change is already underway. In this article, QuickRead presents the presentation made by Retired Judge Platt at the NACVA and the CTI’s Annual Consultants’ Conference, held in Salt Lake City. Judge Platt describes this evolving landscape and employment opportunities. Introduction I appreciate this opportunity to discuss the role of the “expert” in the 21st Century profession of dispute resolution from the perspective of what I now call myself,…