How to apply the landmark cases Delaware MRI (2007) and Bernier (2012) Eric J. Barr, CPA/ABV/CFF, CVA, CFE, analyzes two landmark court decisions—Delaware MRI and Bernier—and offers more clarity on the proper way to value an ownership interest in a pass-through entity under the fair market standard of value.  ...

Important factors to consider in making tax adjustments to pass-through income Damodaran recently wrote about the potential devaluation of dividend-paying stocks if the preferred dividend tax rate were to climb back up to the ordinary rate.  This could inspire valuation experts to make a tax adjustment reducing untaxed Pass-Through Entity (PTE) income to equate it with corporately taxed income that qualifie ...

Should life insurance be considered a repurchase funding asset or a corporate non-operating asset and in what situations? ...

Exits of private equity firms from investments fell 67 percent by volume and 81 percent by dollar value. ...

Valuation professionals must continually keep abreast of the latest news and developments.  Whether it’s the latest Internal Revenue Service (IRS) ruling, a new, wide-ranging court decision, or newly issued standard, trying to stay on top of it all—while managing a practice—can pose a significant challenge.  But as Nancy Gault recently learned at NACVA’s Annual Consultants’ Conference, Around the Valuation ...

Owners Looking to Protect Home Views Buy "Air Rights" to Stop Further Development.  See the Video to Find What One Homeowner Paid $600,000 to Preserve. The latest trend in Seattle's real estate market has homeowners looking up for some quick cash, reports Heather Graf at King 5 News (KVUE, an ABC affiliate)  in Seattle.  Depending on where you live, the air above your roof could be worth a lot of money.  He ...

A Majority ≠ Control or Liquidity Examining actual transactions in the private capital markets and court outcomes figure into whether holding a large block of stock equates with it control or even a premium.  The internal and external factors, legal provisions, and property performance drive this result.  ...

One Medical Practice Could—Depending on How Rules of Thumb are Applied—be Valued at Several Radically Different Prices. Find Out Why! Paul Hyde, in a recent Around the Valuation World™ in 90 Minutes webinar, explained why rules of thumb are dangerous to rely on for valuation. The focus of his argument relied on six simple graphics that illustrated how the value of one hypothetical medical practice could—dep ...

More Detail on Obligations Included in Minimum Lease Payments Required Under ASC 840  Grant Thornton's On the Horizon web publication  explains that leasing agreements vary in their specific accounting requirements when it comes to assessing — and retiring the value of  — leases.    Here's more:  ...

Requiring Valuation Analysts to Have Specialized Trainingk Credentials, and to Adhere to Professional Standards Will Protect ESOP Participants and Beneficiaries   CPA Practice Advisor reports that the President and CEO of the American Institute of CPAs (AICPA), Barry C. Melancon, CPA, CGMA, has publicly announced his organization's support for a new bill in the House of Representatives.  H.R. 2041 would mod ...

A Disparity in Valuation Prices Between Companies Large and Small in Similar Industries Adds to Investment Challenges   Jwalit Vyas at The Economic Times (India) illustrates how a wide disparity in valuation between companies large and small offers an additional challenge for business owners, investors, and financial consultants.  Here's more:  ...

An Overly High Valuation Can Scare Away Investors or Spark a Down Round that Dilutes an Earlier Angel Investment      Mark Boslet at PE Hub explains that with IPOs on track to have their biggest year since 2010 and some major technology disruptions sparking infectious excitement, it's important to keep in mind key fundamentals including not accepting too high a valuation for your business or investment prop ...

Industry Moves to Enhance Transparency of Investments Holding More Than $93 Billion in Assets  The Investment Program Association (IPA), a trade association for non-listed, direct-investment vehicles, announced recently the adoption of the IPA Practice Guideline for the valuation of publicly registered, non-listed real estate investment trusts, The Wall Street Journal reported.   Here's more from a Globe Ne ...

 On the Horizon Offers Two Examples of Appropriate Ways to Apply FASB Guidance.  Plus: New Guidance on Reporting Discontinued Operations and Not-for-Profit Entities Grant Thornton recently published a useful article on applying the equity method in its On the Horizon web-based publication, which also notes that the Fair Accounting Standards Board (FASB) has suggested new guidelines for reporting discontinue ...

Why VCs and Private Equity Pros are Sensitive to IRC 409A Valuations Rand Curtiss weighs in on why IRC 409A option-related valuations for small businesses do not solve real business problems for them. They set minimum exercise prices, asserts Curtiss—but that’s all they do. ...

Understanding Both Sorts of Appraisal is Critical to Valuing Minority, Partial Interests in Holding Entities that Own Real Estate and Other Assets that are Gifted, Sold, or Otherwise Transferred   Randolph Glennon, MAI, CRE, MBA, and president of Eastern Appraisal & Consulting in Portland, Maine, explains in the New England Real Estate Journal why there's growing need for appraisers who understand both ...

Congress Needs to Reduce, if Not Eliminate, Support of the Mortgage Market in Order to Encourage Private Capital to Enter the Market, Says Agency Head Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco said that Congress needs to take action to significantly reduce, if not eliminate, the government’s continued support of the mortgage market and make it more palatable for private capital ...

Past Performance is No Longer a Viable Valuation Tactic: Learn to Anticipate Future Prospects with Data Mining, Proprietary Benchmark Techniques, and a Close Look at Both Cash Flow and Capital Expenditures.    Caleb Slabbert, writing at VentureCapital.org, which bills itself as a non-profit organization that has been "a premier resource for both entrepreneurs seeking funding and for investors who want to he ...

Based in Florida and Employing 600 Personnel in 59 Offices, New Company Is Third Largest Firm Providing Commercial Real Estate Valuation Advisory Services  Forty-two independent CRE appraisal companies, with a total of 59 offices and 145 MAIs, have merged to form Valbridge Property Advisors (www.valbridge.com), Commercial Property Executive reports.  The new company, headquartered in Naples, Fla., will rank ...

Choosing an Appropriate Weighted Average Cost of Capital Definition Sometimes Depends On Context Valuation principles generally hold that the value of a business is largely a function of return on invested capital and growth, writes J. Richard Claywell, since these are the primary drivers of free cash flow. But how does this cash flow relate to the asset and liability values on the balance sheet? ...