My Testimonial Experience Prior to Taking the Witness Stand One unintended consequence of writing unimpeachably neutral expert reports is that often nobody wants to hear what you have left to say. After having spent nearly two years working as an expert witness, authoring an uncounted number of expert reports, subpoenas, discovery requests, deposition questions, and cross-examination questions, I had yet to testify in a single trial or deposition. Getting a chance to testify had become my Red Ryder, carbine action two-hundred shot range model air rifle. With each case that settled, I couldn’t help but to feel like the forensic…
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Debunking Myths and Getting the Numbers Right The author discusses various methods used to trace property; techniques that are used in connection with marital dissolutions.
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For Financial Reporting Purposes In this article, the author revisits the Market Participant Acquisition Premium (MPAP) issued by The Appraisal Foundation and reiterates the findings regarding what is a premium and what that means.
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Case Law Update February 2018 In this case law update, we review one U.S. Tax Court case that provides guidance regarding when is a bad debt business loss deductible and whether contributions of money to a business is equity or debt. In addition, we present several Delaware Court cases; one of them, a post-dissolution case where one NACVA member (and another inactive member) testified and the court addressed the S corporation tax affecting and availability of discounts for lack of marketability. The issues raised there are frequently raised in other dissolution actions and the reasoning provided by the court regarding…
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Factors to Consider Finding the Right Mediator Mediation is a dispute resolution process that is now more popular than arbitration. Many contracts require parties use mediation, if a dispute arises; and courts have adopted the use of mediation to help reduce the number of cases headed to trial. Yet with all this popularity, there remains a significant problem with using mediation: getting the “wrong” mediator. Selecting the “case appropriate mediator” saves resources and increases the probability of settlement. This article’s focus is on what to consider when selecting an appropriate mediator.
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In Closing New Business Deals Client education can have a huge impact in accounting and professional service firms’ content marketing efforts. By providing prospects with increasingly valuable pieces of educational content, you can not only attract them to your firm, but also nurture them as they move into and through your sales funnel.
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Understanding Terms and Bridging a Potential Valuation Gap It is not uncommon for litigation to stem from disagreements over the value of privately held companies and ownership interests in those entities. In those situations, many different values are often discussed as the parties attempt to reach a resolution. It is important to make sure that the parties are speaking the same language as far as the type of value being considered—equity value, enterprise value or invested capital value. While these three types of value are related, there are significant differences between them and understanding those differences is important in reaching…
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or a Ball and Chain In this article, the author discusses his views on how to value a funeral home.
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Overview—Putting it on the Balance Sheet In February 2016, the FASB issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). The existing standard has been criticized because its bright line classification criteria enabled entities to structure leases in such a way as to avoid putting them on the balance sheet. The new standard aims to improve and simplify the financial reporting for leases and create a model that provides for faithful representation of leasing transactions for both lessees and lessors. This article summarizes the change.
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Adherence to Development and Reporting Standards in Family Law Litigation When applied correctly, the Market Approach can link value to market evidence and help support a thorough and well-reasoned valuation. However, valuation analysts often struggle with a variety of challenges when applying the Market Approach that include locating and selecting good comparable companies, selecting or calculating various valuation multiples from reported data, and weighting or selecting indications of value derived from various applied multiples. Recently published research from Doron Nissim at the Columbia Business School at Columbia University NY may shed some light on the best measure of operating performance…
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Delay at Your Peril In this article, the author, a business broker, shares his views on how the coming retirement of business owners will impact business owners themselves and what business owners should consider when meeting with a prospective business broker.
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Provides Independent Validation of Indicated Values Newly-minted valuation analysts may question the reasonableness of their conclusion of value. That is natural. In this article, the author introduces readers to the Hypothetical Willing Buyer-Willing Seller Sanity Check Model. This is a model developed by the author in connection with valuation of a 100% controlling interest.
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Issues Using Transactional Databases and whether there is a Florida Effect that Biases the Transaction Multiplies In this article, the author discusses issues that impact the transaction multiples. He warns appraisers that it is dangerous to assume that the data offered by the transactional databases is consistent from transaction to transaction and, therefore, can be combined into a single sample and then compared to the subject of the valuation. In the article, he discusses three issues. Those are: 1) the vast differences in selling prices reported by the transactional databases; 2) the distorting effect of Florida comparables; and 3) the…
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Research Says “No” In any business sector, one of the biggest challenges is to differentiate oneself. For a variety of reasons, this is especially difficult in the accounting and valuation and appraisal field, where many firms struggle to find ways to stand out. In fact, most firms end up making essentially the same claims about what makes them different. In this article, Dr. Frederiksen discusses his findings and suggests ways to differentiate the services and land clients.
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Opportunities for Valuation Pros The widespread destruction left in the path of Hurricanes Harvey, Irma, and Maria provides ample ground and opportunities for CVA professionals to assist the public. In this article, the author, a CVA, details those opportunities.
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Enterprises, Assets, and Services With the emergence of value-based reimbursement, such as accountable care organizations (ACOs), clinically integrated networks (CINs), and bundled payment models, which rely on achieving the “Triple Aim” of healthcare at lower cost, U.S. hospitals are increasingly looking to change how services are being delivered by seeking more collaborative relationships with physicians, including vertical integration strategies such as the acquisition of healthcare-related enterprises, assets, and services (e.g., physician practices), direct employment, co-management, and joint venture arrangements with physicians and other providers. This abridged article was the first in a series of articles that appear in The Value…
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Principles, Methods, and Applications Everett P. Harry, III and Jeffrey H. Kinrich assembled 45 authors, chosen for their expertise in lost profits damages, and contributed and co-edited this comprehensive lost profits damages “how to” book. The authors pay tribute to Robert L. Dunn, among others, for his vision in identifying the need for this book. The book marks an attempt by the authors to provide a single-source reference for practitioners who are tasked with selecting an appropriate methodology for determining lost profits, carrying out the analysis, and potentially defending their work during proceedings. In this book review, we provide an…
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As the temperature drops and the holidays creep in, case after case either settles or, even better, is granted a three-month continuance. Now you finally have the time to take a long hard look at the lessons you have learned this year, lessons you have applied from years past, and start defining next year’s conquest(s), whatever they may be. This fourth article of the Unimpeachable Neutrality series discusses how the lessons learned help to define and conquer the next 365 days
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From Publicly Traded Companies Where can valuation professionals find compensation data? In this article, Stephen Kirkland discusses leading sources to find compensation of publicly traded companies.
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Insights for Your Practice Four cases are presented in this article that provide valuation, litigation support professionals, and M&A advisors insight regarding how courts are addressing damages claims, challenges to experts, appraisal action challenges, and claims of fraud and breach of contract in connection with M&A transactions. Although the cases are from Delaware and California, they provide insight for readers to use in their practices.