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…
-
-
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…
-
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…
-
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…
-
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…
-
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…
-
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…
-
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…
-
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…
-
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…
-
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…
-
Valuation Implications The U.S. government is the largest payor of medical costs, through Medicare and Medicaid, and consequently has a strong influence on reimbursement to healthcare providers. The 2025 proposed fee changes are significant. This article focuses on the proposed fee changes and how these changes may affect valuations of healthcare practices. The U.S. government is the largest payor of medical costs, through Medicare and Medicaid, and consequently has a strong influence on reimbursement to healthcare providers. The prevalence of these public payors in the healthcare marketplace often results in their acting as a price setter and being used as…
-
A Meandering in the Mind(s) of ChatGPT (Part I of III) This series chronicles the use of an AI generation tool to generate content. Most of the uses the author has heard of from colleagues rely on an AI tool to generate content in response to various questions. Through the series the author shares iterations of an article that relied on AI and provides examples to show how a story can change using AI. Some Perspective I do not use AI assistance in anything. In fact, I do not use autofill, autocorrect, grammar suggestions, or even spellcheck. I do not…
-
Healthcare Industry and Valuation Implications On June 28, 2024, the U.S. Supreme Court issued a seismic decision in which it explicitly overruled “Chevron deference,” limiting the ability of federal agencies to rely on their own interpretation of the laws they administer. This 6-3 ruling is expected to significantly impact the heavily regulated healthcare industry. The authors share their thoughts on how this decision may impact the healthcare industry and valuations. Chevron deference is a legal test established in the 1984 Supreme Court case, Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.[1] In this case, the Court ruled that when…
-
A Series on Managing Uncertainty and Fear The author has testified hundreds of times. Through these experiences, he has gained insight that is not written in the books, or at least not the ones he has been reading as a forensic and valuation professional. In this article, he shares additional insight on what is demanded by expert witnesses. As of the date of this writing, I have testified hundreds of times. Through these experiences, I have gained insight that is not written in the books, or at least not the ones I have been reading as a forensic and valuation…
-
Challenges and Key Takeaways The recent case of The Trade Group, Inc. v. BTC Media, LLC highlights the impact that experts have on judicial outcomes. The litigation revolved around a financial dispute over the Bitcoin 2022 conference and allegations regarding overcharges and financial mismanagement. Through expert testimonies, the Court ultimately provided an opinion based on the crucial contributions of expert witnesses in high-stakes litigation. Expert testimony plays a pivotal role in unraveling complex economic disputes. It is often one of the essential elements in dispute resolution. Why is that? Expert testimony brings specialized knowledge, technical insights, evidence interpretation, and factfinder…
-
Memoirs of a CPA on Getting Started in the Valuation and Forensics Fields Edward Mendlowitz considers himself the last of the “expert generalists”. He published Memoirs of a CPA wherein he relates his story and the lessons learned. Over the years, the author has witnessed the trend towards specialization and proliferation of professional credentials. Mr. Mendlowitz started moonlighting almost immediately after graduating college in 1963 and had enough business to start his own practice in 1969. In this article, he shares tips for newly minted professionals. I consider myself the last of the “expert generalists” and published my Memoirs of…
-
In the Analysis of Personal Goodwill In the sale of a C corporation in an asset deal, the sellers may argue that a portion of the purchase price is for personal goodwill so that the proceeds are not subject to double taxation. In the context of divorce, personal goodwill may not be a divisible asset, while enterprise goodwill is. This article discusses the quantification of personal and enterprise goodwill using the multi-attribute utility model (MUM). A key consideration in both the sale of closely held C corporations and valuations for marital dissolution purposes involves the existence and value of personal…
-
A Call to Action E-mail is our front line of communication. And because of that, everyone’s inbox is overloaded. Of course, your e-mail is brilliant/critical/urgent/important. So how do you write an e-mail that gets opened and read? And if you read to the end, there’s a bonus e-mail tip you will want to try out. E-mail is our front line of communication. And because of that, everyone’s inbox is overloaded. Of course, your e-mail is brilliant/critical/urgent/important. So how do you write an e-mail that gets opened and read? And if you read to the end, there’s a bonus e-mail tip…
-
Use in Private-Business Valuation (Part IV) In this fourth article, the authors show how to apply the IPCPL theory using public market cost of capital. Read Part I, Part II, and Part III Application of IPCPL Theory When Bob Dohmeyer, Pete Butler, and Rod Burkert published their article on the IPCPL in 2013, they developed a discount rate from the Deal Stats database. In 2015, we published an article in which we set forth that their incite that the difference between the cost of capital in a public market and private market is largely due to the difference in transaction…