Moving Forward when Valuing Asset-Intensive Operating Companies In this article, Heidi Walker, the author, revisits the Tax Court and Ninth Circuit’s unpublished decision in Estate of Giustina and the Supplemental Memorandum Opinion issued by the U.S. Tax Court this past year.
-
-
David Einhorn of Greenlight Capital Inc. is no stranger to controversy. Over the years, he has had a knack for shining a light on an asset and raising a valuation question. He will wade into a capital structure issue as was the case in 2013 when he sued Apple Inc. to issue a dividend paying preferred stock. Jeff K. Davis, managing director of Mercer Capital’s Financial Institutions Group, discusses this as well as the credit cycle for General Motors. To read the full article in Mercer Capital’s Financial Reporting Blog, click: GM Trades at 5.6x Earnings for a Reason; Subprime…
-
Too often, effective collaboration is taken to mean that everyone quickly agrees and is happy with a collective decision, but this idea overlooks the truly creative tension that comes from differing viewpoints. In this article, Liane Davey, co-founder of 3COze Inc., describes exercises to help overcome your team’s fear of constructive conflict. To read the full article in Harvard Business Review, click: If Your Team Agrees on Everything, Working Together is Pointless.
-
Analyze the Data to Find the Right Technology Companies should not necessarily be early adopters of new technology, but they should be “fast changers” that adapt quickly based on the data available to them. Rather than shying away from new and innovative solutions, analyze the value they may be able to provide. John Brandon, contributing editor for Inc.com, shares some insightful tips. To read the full article in Inc.com, click: How to Help Your Company Adopt New Technology.
-
Constellation Brands, the third-largest beer seller in the U.S., is modeling several scenarios related to a possible increase in taxes on imported goods. To read the full article in CGMA Magazine, click: How a Major Beer Importer is Planning for U.S. Tax Reform.
-
Risk Management, Compliance are Key Challenges, Auditors Say Forty-one percent of audit committee members point to risk management as the biggest challenge to their organizations this year, according to a recent KPMG survey. Other major issues include regulatory compliance and “maintaining the control environment in an extended organization,” respondents said. To read the full article in CFO, click: Audit Committees Face Expertise, Risk Management Challenges.
-
The focus of this post is not to comprehensively explain the new revenue recognition standard. Instead, we examine one public company’s experience with the transition (Workday) and then highlight a few areas that may be of interest to analysts, finance managers, and interested onlookers from a valuation perspective. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Revenue Recognition: What’s an Analyst to Do? This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
-
7 Keys to Becoming a Visible Expert In this article, Dr. Frederiksen discusses seven keys to becoming a visible expert.
-
How to Silence the Hired Gun While evidentiary rules and ethical codes issued by professional bodies like the NACVA and AICPA prohibit accounting and valuation experts from taking an advocate position, the adversarial nature of the U.S. legal system creates a market which at times demands a “hired gun” expert witness who caters their opinion of damages or business value to that which most convincingly favors the side that hires them. This article discusses an expert’s conceptual quest for unimpeachable neutrality and provides guidance on how to silence the hired gun, maintain one’s integrity, all while staying gainfully employed.
-
Analyzing corruption risk should be a key factor in businesses’ research into a new market. Transparency International’s Corruption Perceptions Index indicates corruption worsened in many markets in 2016. To read the full article in CGMA Magazine, click: Why Corruption Risk Should be Taken into Account When Evaluating New Markets.
-
IRS Division Releases List of Examination Issues The Internal Revenue Service Large Business and International Division has released a list of 13 issues that could be the focus of upcoming examinations. Tammy Whitehouse summarizes the guidance. To read the full article in Compliance Week, click: IRS Identifies 13 “Campaigns” for Tighter Compliance Scrutiny.
-
Maybe I am reading too much into it, but l was struck by how the Ruth’s Chris Steak House in Lafayette, La. was packed on a mid-March Tuesday night. A year ago when I ate there, I was one of maybe a half-dozen people in the restaurant. Jeff K. Davis, CFA, Managing Director of Mercer Capital’s Financial Institutions Group, discusses how people’s reaction of being tight-fisted vs. loosening-up can change quickly based upon perceptions. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Reading the Tea Leaves at Ruth’s Chris Steak House in Lafayette. This article is…
-
ANAV Method Illustrative Example This discussion is the final installment of a series related to the asset-based business valuation approach. The prior discussion described the theory and methodology of the adjusted net asset value (ANAV) method. This final discussion presents an illustrative example of the application of the ANAV method.
-
For Calculating Future Lost Profits Robert Dunn and Everett Harry published their oft cited Modeling and Discounting Future Damages in 2002. The article laid out the process for assessing future lost profits and discounting them to present value. They argued modeling future losses reduced the uncertainty related to the loss calculation and therefore reduced the risk premium to be included in the discount rate. They also argued modeling future losses and using a risk-reduced, relatively low discount rate was easier for judges and juries to understand. While their discussion on a risk-adjusted discount rate has been somewhat controversial, the need…
-
How CIOs and CFOs Can Find Common Ground In many organizations, chief information officers and CFOs are at odds, and their interactions are strained by misunderstandings. Bryan Mueller, principal consultant at ISG, discusses ways to overcome this disconnect, and CFOs can help by promoting cost transparency, hiring the right staff, and building an effective planning process. To read the full article in CFO, click: The CFO-CIO Relationship: Bridging the Gap.
-
Cost overruns in cloud projects are common, and a few common problems are often to blame. Issues with data integration, the need for custom code and project-management challenges can all lead to higher-than-anticipated costs. David Taber helps you understand the driving specifics and what steps can be taken. To read the full article in CIO, click: Anatomy of a Cloud Project Cost Overrun.
-
For outsiders observing a scandal at a company or organization, the situation often seems implausible or incomprehensible. How did leaders let it happen? Why did so many people go along with the wrongdoing? And for so long? The bigger the fallout, the more we shake our heads in disbelief. Kellogg’s Maryam Kouchaki on understanding—and avoiding—ethical breakdowns. To read the full article in strategy+business, click: Why Good Employees do Bad Things.
-
In the Crosshairs of Regulators In this article, Mark Zyla of Acuitas discusses trends in fair value measurements in financial reporting and enforcement actions. Mr. Zyla notes that financial reporting is increasingly scrutinized by regulators. He observes that recent inspection reports of accounting firms that audit publicly traded entities by the Public Company Accounting Oversight Board (PCAOB) have indicated an increasing focus on the audit procedures related to fair value. The Securities and Exchange Commission (SEC) has also showed concerns regarding outside valuation specialists who assist management in determining fair value measurements. The increased scrutiny has put a spotlight on…
-
The Adjusted Net Asset Value Method This discussion is the fifth part in a series regarding the asset-based business valuation approach. Previous discussions described the theory and application of the Asset-based Approach. And, previous discussions described the theory and application of the asset accumulation (AA) method. This discussion describes the theory and application of the adjusted net asset value (ANAV) method.
-
Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, which can be filed by small exempt organizations that meet certain gross receipts and assets tests, now has 29 help icons on various parts of the form that link to explanations, instructions and other resources, the Internal Revenue Service announced Tuesday. Sally Schreiber, JofA senior editor, explains. To read the full article in the Journal of Accountancy, click: New Form 990-EZ has Help Icons to Aid Exempt Organizations in Filing.