Use of photography in forensic and valuation engagements The purpose of this article is to provide the CPA/expert a brief introduction to the use of photography in a valuation or forensic engagement. It is not intended to be an all-inclusive training manual in forensic photography. Criminal forensic photographic procedures may, due to the differences between civil and criminal law, be materially different. ...

After the media gaffe that disgraced LA Clippers owner, Donald Sterling, the mogul was fined $2.5 million by the NBA. There’s a misconception that he’s being required to sell the team as part of his lifetime ban from the sport, but that’s not actually true. NBA commissioner, Adam Silver, is asking the NBA Board of Governors to force Sterling to sell, which requires three quarters of the league’s owners to s ...

Professor, Aswath Damodaran, of the NYU Stern School of Business has released his 2014 Data Page online. Updated annually and exhaustively researched, the data page offers in-depth information on 41,000 companies in 131 worldwide markets, including measures of operation, leverage, pricing, equity risk premiums and country risk. One of the major changes to this year’s data page was the switch from Value Line ...

A two-way street In this article, Britt Madden and Britt Madden, Jr. respond to Jim Hitchner’s July 2013 QuickRead article on “Rigging the Cost of Equity”. The authors contend that the rigging is more likely the result of a lack of understanding the current status of small business in the present economy, which has left it forever changed. ...

Suggestions for business valuation professionals thinking about retiring This article contains some tips from a long-time practitioner to business valuators who are reaching retirement age, but are not ready to retire and just play golf. ...

With Colorado and Washington state legalizing casual use of marijuana, more states considering it and 20 allowing medicinal usage, at least 60 publicly traded entities have scrambled to cash in by offering pot penny stocks. Virtually none emerged through an IPO to avoid disclosure scrutiny. Real estate, marketing and even oil outfits have gotten into the game, either through reverse mergers or declaring a n ...

The average major league baseball (MLB) team today is worth $811 million, up 9 percent from last year. That’s not too bad for being in the middle of the pack. To make it to the top, however, a lucrative deal and strong regional network are essential. For the first time, five teams combine the right ingredients to make it over the $1 billion mark. The increase in value for the teams was more than double the ...

Undervaluation can be costly The recent U.S. Supreme Court case, U.S. v. Woods, overturned legal precedent and signaled that accuracy-related penalties can be imposed in more instances. This broad interpretation exposes clients and practitioners to substantial penalties. In this article, three recent cases are summarized on how, when, and why accuracy-related penalties are applied. ...

Fifteen U.S. Representatives have sent a letter to the U.S. Small Business Administration (SBA) seeking clarification as to why the agency changed its requirements regarding real estate appraisers handling going concern appraisals for special use properties. In 2011, the SBA allowed appraisers to take on such projects after completing an eligibility course. As of January 2014, the agency changed its valuati ...

While most don’t see a benefit to speaking a second language in their personal or professional life, the increasing diversity of large cities and unexpected international elements in business deals is stressing its importance. Even though you may not remember any of your high school Spanish or German, it’s never too late start again, if for no other reason than the financial incentive involved. The Economis ...

Understanding the different aspects of an industry is key to evaluating a company’s future performance Understanding a subject entity’s industry is a hallmark of any good valuation report. Conducting a very detailed and intense industry analysis can provide valuation analysts with specific knowledge needed to determine an appropriate conclusion of value. As a general rule, a company’s performance is commens ...

Recent BV conference discusses DLOM for real estate LLCs This article contains a review of a recent business valuation conference presentation on determining a discount for lack of marketability (DLOM) for real estate holding companies. ...

Currently, 20 states and the District of Columbia allow some type of legal marijuana use.  On January 1st of this year, supply shops all across Colorado began selling to the general public (age 21 and over), in accordance with a voter referendum.  Medicinal use bills have been filed or are expected to be introduced in eight additional states, while full legalization bills like that of Colorado have been fil ...

It’s not as simple as it seems This article explores the fact that the valuation of a simple debt instrument, such as a promissory note, can be anything but simple. It is observed that the sum of unpaid debt, as well as accrued interest, may well overstate the value of the promissory note. Also covered is whether assets tied to notes need to be valued separately. ...

According to a recent report from the Office of the Inspector General (OIG) with the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac continue to fail to properly analyze data collected from the Uniform Collateral Data Portal (UCDP) and take considerable risks when purchasing and guaranteeing single-family residential mortgages.  The report charged both Freddie and Fannie with not consideri ...

If you use a company's internally developed projections when developing a discounted cash flow estimate of value, what are the real risks? This article offers a practical guide to using a company's budget and plan for utilizing future projections in a discounted cash flow calculation. ...

The Journal of Accountancy is reporting that the SEC’s strategic plan for 2014-2018 contains an initiative that involves reviewing whether a “single set of high-quality global accounting standards is achievable”.  While not specifically mentioning the International Financial Reporting Standards (IFRS) the location in the 39-page document where the initiative appears also states that the consideration is par ...

Separability and transferability are key This overview examines intangible assets within business combinations through the lens of FAS 141. Fair value is covered as well as identification and classification protocols. ...

While real estate investment trusts (REITS) have strengthened their credit profiles in the last few years, Fitch Ratings is anticipating a decline in their positive rating for 2014.  According to Fitch, the upgrade/downgrade ratio for U.S. REITS has remained at 10:1 since 2011 and that most have now completed their deleveraging techniques.  As a result, representatives for Fitch expressed that “credit metri ...

Accuracy is everything This article provides an overview of the significance of regression analysis in business valuations, with a particular emphasis when applying the Market Approach. The theory is presented as to why regression analysis is superior to ratio analysis. ...