In case you missed it, the Professional Standards and Guidance Committee (PSGC) of the Appraisal Institute (AI) submitted its official comments to the Appraisal Standards Board of The Appraisal Foundation regarding feedback to drafting changes to the 2016-2017 USPAP.  In its candid response, AI says USPAP has a “mixed record” when it comes to addressing appraiser behavior in a way that establishes pu ...

In its Washington Report and State News web section, the Appraisal Institute (AI) recently reported that the U.S. Small Business Administration (SBA) released an updated Standard Operating Procedure 50-10 5 F.  The update institutes guidelines for SBA lenders making use of SBA credit assistance.  The alteration affecting valuation involves business and intangible assets in circumstances where there is a cha ...

Just because a corporate stock price is on the rise, is that justification enough for the huge payouts executives receive?  While shareholder returns are usually the most prominent factor considered by corporations when determining executive pay, many elite business school educators and industry experts don’t think they should be.  They contend that executives regularly profit off short-term bullish markets ...

In an article titled, “PCC to Ask FASB to Endorse First Private Company GAAP Exceptions”, under the subhead, “Business combinations”, the Journal of Accountancy reveals that the Private Company Council (PCC) approved a proposal to FASB that would allow a private company to elect to amortize goodwill acquired in a business combination on a straight line basis over 10 years or less. The proposal is conditiona ...

A review of BVR’s Guide to Discounts for Lack of Marketability. If you are looking for a comprehensive source of information about the DLOM and the cases that business appraisers consider for confirmation of a method, look no further than BVR's Guide to Discounts for Lack of Marketability, Fifth Edition by John Stockdale, Sr. ...

The standard 10 stages to use in an intangible asset engagement In this second installment, Robert F. Reilly completes his review of the 10 typical stages of any intangible asset analysis engagement. For purposes of this article, an intangible asset analysis may include a valuation, damages analysis, transfer price study, or other economic analysis. The business appraiser will typically consider these stage ...

The standard 10 stages In this first half of his two-part series, Robert F. Reilly summarizes six of the ten typical stages of any intangible asset analysis assignment. For purposes of this article, an intangible asset analysis may include a valuation, damages analysis, transfer price study, or other economic analysis. The business appraiser will typically consider these stages, or elements, before, during, ...

How we define tangible and intangible assets is paramount to accuracy and fairness in valuation. In this article, Dr. Carl Sheeler, responds to a September 9, 2013 concept paper authored by Rick Baumgardner, Chair of the Appraisal Practices Board of the Appraisal Foundation, titled “Valuation Issues in Separating Tangible and Intangible Assets.” ...

Things change because markets are not logical; markets are emotional. In an analysis featured on CNNMoney.com, Ben Horowitz lays out the specific challenges of raising capital and valuing startups in the current economic climate. In an eye-opening comparison, he looks at the price/earnings ratios (P/E) of all S&P 500 IT companies for the last 18 years. With this wide of a time span, one might expect som ...

An alternate business valuation report format This article briefly describes an alternate format for business valuation (BV) reports that can make them more understandable. ...

Structured settlements are a useful tool, but not always advisable! There is plenty of acrimony in marital dissolutions. One way to possibly address the financial concerns of all and reduce acrimony is to consider the use of a structured settlement. A structured settlement replaces one lump payment with smaller payouts over time. It’s a concept frequently used in workers’ compensation or tort cases, but mor ...

In their recently released Beige Book, the Board of Governors of the Federal Reserve System break down the economic performance of the nation within seven business sectors across 12 metropolitan economic districts.  Prepared at the Federal Reserve Bank of San Francisco, the findings are based on all data collected on or before August 26, 2013.  Business sectors covered include consumer spending & touris ...

  According to the US Bureau of Economic Analysis, “research and development” (R&D) are now considered a fixed investment. The report, released last month, contains GDP figures categorizing R&D with this distinction. R&D now joins software in a new category labeled “intellectual property products”. While some see the change as only affecting a small number of economists, others see the move as b ...

Valuing Nokia Siemens Networks Nokia Corporation is bound to look very different after Microsoft buys its devices division. When the initial purchase was announced, most in the industry were shocked. The bigger question is: How much will the remaining parts of the company be worth once the deal is done, and how should they be valued? Analysts from JP Morgan Cazenove provide a very interesting breakdown in a ...

Working within the DLOM ambiguity This review examines the impact of volatility as a risk factor in the discount for lack of marketability (DLOM) and answers questions regarding the flexibility of adjustment periods. ...

The IRS recently issued regulations (T.D. 9630) affecting how the differential income stream approach applies to cost-sharing agreements.  Nearly two years ago, “final” cost-sharing rules were published under Sec. 482.  This newer round of regulations is intended to ensure that cost-sharing agreements are in line with Sec. 482’s commensurate-with-income principle.  In its earlier attempt to guarantee pricin ...

So why do we, as appraisers, differ from judges when it comes to subsequent events? Traditionally, valuation and litigation support professionals only consider facts known or knowable as of the valuation date, yet courts will look at subsequent events. This article examines how a valuation and litigation support professional may address subsequent events. ...

Equity funds now able to engage in mass advertising In just a few days, the ban that prevents private equity funds from marketing directly to the public will be lifted. A recent review by Michelle Park of Crain’s Cleveland Business examines what this might mean for various private equity and venture capital funds and their future customers. ...

In a recent presentation to donors and alumni, University of Louisville president and economist, Dr. James Ramsey gave what most thought would be a gloom and doom “state of the university” address.  While government funding and support from the State of Kentucky are certainly in decline, Ramsey’s presentation was surprisingly upbeat.  Freshmen test scores were up dramatically.  The graduation rate was stron ...

With the kickoff of the new football season, Forbes has once again, released its much anticipated valuation list of Most Valuable NFL Teams.   How the numbers stack up gives a very interesting view inside the most valuable professional sports league on earth.  According to the Forbes data as reported by Pressboxonline.com, the average NFL team increased in value by 5 percent.  Interestingly, winning the Sup ...