Part I of II When companies suffer a cyber incident, they often look to their insurance policy for coverage to help mitigate financial exposure. Additional external resources also help the insured get back to normal operations. Part I of this series poses several questions to assist insureds or policyholders in thinking through the common issues. Part II will present some strategies to help organizations further reduce their risk posture. Introduction Cyber risk is now a normal part of our personal and professional lives. When companies suffer a cyber incident, they often look to their insurance policy for coverage to help…
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Techniques Used in a Wind Power Valuation Engagement This article is aimed at valuing renewable interests or rights which is straight forward requiring basic application of valuation techniques. Appraisals that consider diminution of land estate values, damage assessments, complex end of life considerations, repowering analysis require more specific analysis and build up methods to establish defensible valuations. This article, part of a two-part series that focuses on renewable energy valuations, is written to provide a foundation for the novice appraiser who wishes to better understand renewable assets and the specific components that comprise a valuation. The forthcoming article will provide…
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Assessing the Engagement Prospect In this article, the author shares how he crafted an engagement letter that enabled him to earn far more than a fee he was prepared to accept. Understanding a prospect’s motivation and the underlying facts enabled him to craft an engagement letter that worked for both and earned him $10,000 more. By listening to my prospect and understanding the pain he was in, I crafted an engagement letter with three pricing options that provided the solution he needed. It resulted in me getting a $10,000 higher fee based solely on my report delivery date. Quick Background…
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An Overview of the Physician Compensation Surveys Beginning in late May each year, numerous industry normative benchmark physician production and compensation surveys begin publishing the most recent year’s reports. When consulting benchmarking survey data for assessing physician compensation arrangements for FMV, it is important to understand and critically evaluate the quality of the data. This article provides and overview of these surveys. It is the most wonderful time of the year—Survey Season! Beginning in late May each year, numerous industry normative benchmark physician production and compensation surveys begin publishing the most recent year’s reports. These healthcare and specialty specific surveys…
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Frequently, the competing attorneys are inadequately equipped to educate the mediators and arbitrators about the salient facts and the governing legal issues in dispute. Consequently, trial courts increasingly have encouraged attorneys to involve their experts in the ADR process. The author describes the expanding role the expert witnesses may and should have in ADR. Civil litigation has become increasingly complex and civil dockets have become far more congested because of the COVID-19 pandemic. To avoid the expense and delay of litigation in civil cases, trial courts and litigators have turned to alternative dispute resolution (ADR) in the forms of mediation…
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Using Forensic Accounting Skills to Your Advantage When valuing a business, one essential step in the process is to review and analyze the subject company’s historical financial information. This information allows a business valuator to analyze the company’s past performance and pinpoint trends in the business to forecast its future performance. The author in this article shares his opinion regarding items that a business valuator may encounter in an engagement that merit normalization. When valuing a business, one essential step in the process is to review and analyze the subject company’s historical financial information. This information allows a business valuator…
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Connelly v. United States—Do Redemption Agreements Create a Business Liability? Most have some form of agreement and financing in place to address sudden changes in ownership. In Connelly v. United States, a unanimous U.S. Supreme Court may have turned many of those plans on their heads. The question before the Court was whether a redemption agreement created a liability to the company. The author discusses the decision and impact it may have on succession planning. One of the great challenges for privately held businesses is dealing with the unexpected departure of an owner, whether by disability or death. Most have…
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Ryan LLC v. FTC On August 20, 2024, a Texas federal judge stopped the FTC’s ban on noncompete agreements from going into effect on September 4, 2024. This decision comes after the FTC issued a final rule on April 23, 2024, that bans employers from imposing noncompetes on their employees. The FTC asserted that this exploitative practice kept wages low and suppressed new ideas. While the FTC’s ban will affect all industries—not just healthcare—it comes at a time when healthcare employers across the U.S. are struggling with staffing shortages. This article delves into the decision and ramifications of the decision.…
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Unimpeachable Neutrality in the Age of Artificial Intelligence The world of economic damage and business valuation is evolving rapidly, with artificial intelligence (AI) poised to become an indispensable tool for financial expert witnesses. As with any technological advancement, its use and implementation with regards to expert opinions, conclusions, and testimony must be handled with unimpeachable neutrality, a hallmark of credibility in the courtroom. This 19th article of the Unimpeachable Neutrality Series explores how financial experts can integrate AI into their practice while maintaining unimpeachable neutrality, integrity, reliability, and professionalism. The world of economic damage and business valuation is evolving rapidly, with…
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Turn Clients into Your Advocates Existing clients can be your advocates and a source for future work. In this article, Rod Burkert discusses how to cultivate this under used referral source. I started my solo valuation practice in July 2000. Because I specialized in estate/gift valuations, most of my work was once and done. Looking back, my biggest regret was not cultivating more of those clients—who were already starting to know, like, and trust me—into longer term consulting relationships. For example, many of the owners I worked with in a valuation-only capacity went on to transition their companies, and I…
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My First Use of AI for a Work Assignment Recently, the author received an assignment which called for him to make a calculation that he had not performed in the past. With great hesitance, he decided to ask AI for help. In making the leap to enter the AI pool, he found the answer he needed and confidence to “try it again.” He has found a new tool to put in his litigation support tool kit. In this article, he shares his experience. I am 68 years old with a birthday coming up in October. This means next year I…
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Ensuring Accurate Valuations with Real-World Testing One of the key assumptions valuation professionals must make is about a company’s capital structure. This article explores factors valuation professionals should consider as they arrive at the debt and equity used to value the entity. Business valuation and financial modeling involve navigating a wide range of assumptions, and for the resulting values produced by these models to be truly meaningful, these assumptions need to be well-grounded. One of the key assumptions valuation professionals must make is about a company’s capital structure. This term refers to the specific mix of debt and equity a…
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A Forensic Investigation Opens IRS-Floodgate! In this article, the author critiques the IRS Participant Guide for Marijuana Companies. This 200-page guide provides general instructions to the service on the valuation of cannabis farms. The author argues that the compliance guide is completely inaccurate concerning the audit of cannabis cultivation. The author proposes that forensic and valuation professionals employ a series of tests in lieu of the IRS guidance. William Fowler, a former IRS Large Case Exam Officer, agrees with renowned attorney, Nick Richards of Greenspoon Marder, that the general suggestions of the IRS pertaining to its Cannabis Compliance Initiative is…
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From a Forensic Accountant’s Viewpoint Forensic accountants are frequently retained to evaluate economic damages arising from a multitude of circumstances. These engagements require a set of specialized knowledge unique to the facts of the case. In many cases, a forensic accountant will be retained to evaluate lost income arising from a business interruption loss. This article compares a forensic accountant’s involvement in a lost income analysis to that of a lost wage analysis. Introduction Forensic accountants are frequently retained to evaluate economic damages arising from a multitude of circumstances. These engagements require a set of specialized knowledge unique to the…
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Awaiting Proposed ESOP Regulations In April of this year, the author wrote “Adequate Consideration” Defined? for QuickRead. Since then, the author has regularly checked for updates from the Department of Labor (DOL) with respect to the definition of adequate consideration as it pertains to section 408(e) of the Employee Retirement Income Security Act of 1974 and employee stock ownership plans. Although there have not been any regulatory updates from the DOL (as it pertains to the definition of adequate consideration), there is some news on the topic to share. In April of this year, I wrote “Adequate Consideration” Defined? for…
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The Maggard v. Commissioner Tax Court Opinion S Corporations are required to have one class of stock. In this article, the author discusses the recent Maggard v. Commissioner U.S. Tax Court opinion and addresses whether a disproportionate distribution violates the one class of stock requirement. In any financial analysis of a company, we must consider potential tax liabilities. Since many small businesses operate as S corporations, the possibility of their S status being terminated retroactively can be a major concern. One potential way to intentionally or unintentionally terminate S status is to violate the requirement that the company have only…
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Approaches, Standards, and Terms Although machinery and equipment appraisals differ from business valuations as a distinct branch of the appraisal practice, many overlapping concepts reinforce and support the key factors needed to establish a reliable and defensible opinion of value for the subject assets. This article provides a primer on the subject matter. “In the world of valuation, the most important element is to understand what drives value.” Bruce Greenwald (economist and professor) Although machinery and equipment appraisals differ from business valuations as a distinct branch of the appraisal practice, many overlapping concepts reinforce and support the key factors…
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A Meandering in the Mind(s) of ChatGPT (Part III of III) In the first two articles of this three part series, the author introduced a brief history of her own word processing software use and preferences, then used several models within an AI tool, ChatGPT, to generate an article with a single prompt. There are some issues with prompts. For instance, the author found that the tools sometimes interpreted them as an instruction to avoid the use of subtitles, other times as an instruction to exclude subtitles from the word count. The author concludes with her findings regarding the current…
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A Meandering in the Mind(s) of ChatGPT (Part II of III) This is the second article of a three-part series. In the first article, the author introduced a brief history of her own word processing software use and preferences then used several models within an AI Tool, ChatGPT, to generate an article with a single prompt, “The article must be between 4750 and 5250 words, not including subtitles. The article must … Read Part I here. What You Missed in Part I I introduced a brief history of my own word processing software use and preferences then used several models…
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Rethinking How to Connect Effectively on LinkedIn While LinkedIn provides professionals an opportunity to connect, not all connections are desirable. In this article, Rod Bukert shares his views on how to effectively connect. I imagine you count many business valuation (BV) colleagues among your LinkedIn (LI) connections. But unless they’re sending you work, it’s not your best move. You see, if you are connected to someone, you see each other’s updates on your respective feeds. And because your updates get read by your BV colleagues, who are most likely friends, you are sending them Facebook-like information … stuff that’s nice…