Audit quality concerns raised by a spike in unsatisfactory results from firm/engagement inspections performed by the regulator and the possibility of audit firms being sued for corporate failures warrants a fresh look at professional skepticism. Here is Brian Monegi’s take on this. To read the full article in ASA, click: Analysis: Professional Skepticism: in the Age of Fair Value Measurements.
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Mercer Capital started writing weekly about fair value reporting in 2013. Looking back over more than three years and 150 posts, it seemed an opportune time for them to review their posts and compile what might, for lack of a better term, be called a “Greatest Hits” collection of their favorites. Travis Harms, lead of Mercer Capital’s Financial Reporting Valuation Group, introduces you to their new book entitled, Market Participant Perspectives: Selections from Mercer Capital’s Financial Reporting Blog. To learn more about this collection, read the full article in Mercer Capital’s Financial Reporting Blog, click: Market Participant Perspectives. This article…
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Value and Business Challenges in the Budding Cannabis Industry QuickRead’s Technical Editor, Roberto Castro, reviews BVR’s What It’s Worth: Value and Business Challenges in the Budding Cannabis Industry.
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A Closer Look at Unjust Enrichment Financial experts typically calculate damages remedies that focus on a plaintiff’s loss that is quantified either through lost profits or lost business value. In contrast, unjust enrichment is a damages remedy that measures the defendant’s benefit or gain. While the three remedies all serve to quantify damages, an expert must understand the similarities and differences among the remedies to render a relevant and reliable opinion that can withstand the court’s scrutiny in litigation. This article discusses issues that arise, measuring unjust enrichment and how it differs from a lost profit calculation.
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Social media presents risks and opportunities. Demonstrating expertise and reaching new clients are among the ways social medial can be valuable for finance professionals. Sean Stein Smith, assistant professor at Rutgers, discusses how you can utilize this tool to your benefit. To read the full article in the Journal of Accountancy, click: 4 Ways Accountants Can Get More Out of Social Media.
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The International Monetary Fund has warned that sluggish economic growth throughout the world could bolster an anti-trade backlash that has become a feature of politics in both the United States and Europe. “We have not done a great job in the advanced countries of paying attention to those who lose from trade,” said Maurice Obstfeld, the fund’s chief economist. To read the full article in The New York Times, click: I.M.F. Warns of Anti-Trade Sentiment Amid Weak Global Growth.
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On October 13, 2016, RSP Permian announced the acquisition of Silver Hill Energy for approximately $2.4 billion dollars. Based on RSPP disclosures, the assets received include: 1) wells currently producing 15,000 barrels of oil equivalent per day; and 2) 41,000 in net acreage throughout Loving and Winkler County Texas. Grant Farrell, vice president, explains the details of this transaction. To read the full article in Mercer Capital’s Financial Reporting Blog, click: RSP Permian/Silver Hill Energy: A Closer Look at the Acquisition. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the…
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Can it Hurt the Expert? Mediation is a dispute resolution process. So, what is a process? A process is a procedure, a course of action, or a methodology. Mediation has been around for several thousand years, and the joint session has always been a pivotal part of that process. Historically, the mediation process included beginning with a joint session. Mediation is after all a facilitated negotiation. When individuals negotiate, they interface with one another, exchange information, and attempt to work out a settlement. Now some are abandoning not only the initial joint session, but also all joint interaction between the…
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Why it Shouldn’t be A Dirty Word in the Valuation of Physician Practices The topic of goodwill in a physician practice acquisition continues to be hotly debated. There are very different viewpoints from reputable appraisers on how to value physician practices and whether hospitals can pay for goodwill in an acquisition. I often hear healthcare professionals involved in acquisitions say, “Hospitals can’t pay for goodwill.” However, there is no legal or financial reason why goodwill cannot be considered in a physician practice acquisition. This article discusses the merits of considering and including goodwill in the valuation of a physician practice.
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In fairly short order, robots have begun taking over in the corporate world. Don’t be alarmed. This is nothing like the feared “singularity,” that prophesied (if dubious) moment when machines become smarter than humans and then, to prove it, commence wiping us out. David McCann delves into this change to corporate finance processes. To read the full article in CFO, click: Robots, Robots Everywhere.
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How to Secure a Higher Salary Be willing to negotiate for a higher salary when you get a job offer, as this is an opportunity to raise your pay by a significant margin. Alison Green offers four other tips for securing a better salary. To read the full article in U.S. News & World Report, click: 5 Things to do Differently if you Want to Earn More Money.
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After a steady build-up since the end of the credit crisis, 2016 is going to be marked as the year when the venture capital industry lost momentum, although not for a lack of investors. Money has continued to pour in as riskier VC investments are still expected to outperform listed alternatives. Madeleine Harrigan, senior financial analyst with Mercer Capital, explains what is happening. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Non-Traditional Venture Investors are Changing the Rules of the Game. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. …
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A Valuation Perspective In this article, three U.S. Tax Court cases are discussed. Each case stems from the fallout which occurred after the discovery of the Madoff Ponzi scheme amounted to more than just lost investments for each of the investors. The end-effect is much more far-reaching and complex, as many investors have been forced to pay hefty legal bills in a battle to reduce their estate tax liability on monies that did not actually exist. To confound the fight, the battles are complex, and sometimes a matter of first impression for the Tax Court.
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Using the Empirical Method Business appraisers around the country have historically used comparisons to the averages found in restricted stock studies to determine a discount for lack of marketability in their valuations of a privately held, noncontrolling interest in a business. While the average discounts from restricted stock studies are useful and indicate that discounts for lack of marketability do occur in arm’s length transactions, more analysis is needed to apply the underlying data to the valuation of privately held minority interests. In this article, the author illustrates his views developing the DLOM.
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What NACVA is Doing to Protect Our Industry On August 4, 2016, the U.S. Treasury in lock-step with the Internal Revenue Service (IRS) published Proposed Treasury Regulation 163113-02 (hereafter, the “proposed regulations”) which intend to drastically alter the application of current Internal Revenue Code §2704, particularly as it applies to valuations of family owned businesses and family farms. The proposed Treasury regulations were long-expected and released nearly a year beyond when they were first intended to be released. However, along with the late release, the proposed regulations contain a very short fuse as they intend to put these new rules…
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By developing expertise in a new practice area, a CPA can increase income and become a more well-rounded professional. Robert M. Caplan, CPA, shares his helpful insights on how to help you and your practice. To read the full article in The Tax Adviser, click: How to Add a New Specialty to Your Practice.
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Demons and witches are scary, but the Creatures from Schedule C and the Overstatement Ogre can be downright terrifying, especially if they generate a notice from the Internal Revenue Service. Not sure who they are? Ann Marie Maloney, communications manager for AICPA, says, read on, if you dare. To read the full article in AICPA Insights, click: 5 Scary Tax Characters to Watch Out For.
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Since the Federal Reserve issued guidance on leveraged lending limits, borrowers and lenders have been interested in the ratio of debt-to-EBITDA in proposed financing packages. However, banks are supposed to steer clear of deals for which the ratio is 6.0x or greater. Travis Harms, Mercer Capital’s Financial Reporting Valuation Group lead, explains the topic of earnings adjustments. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Ultimate Earnings Adjustments. 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/.
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A White Paper Detailing Use of the Pluris Database to Develop a DLOM (Part III of III) The Pluris DLOM methodology involves calculating two values: Restricted Stock Equivalent Discount (RSED) and Private Equity Discount Increment (PEDI). Does RSED represent an illiquid position that does not directly relate to the lack of marketability of a private held business? How reliable is the RSED DLOM? As for PEDI, how reliable is the methodology? In this article, Marc Vianello answers these questions and provides more insight on the methodology employed. Read Part I here. Read Part II here.
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Make the Website Dynamic, Engaging, Educational, and Targeted In this article, Dr. Frederiksen makes four recommendations to improve a website with the goal of turning the visitor into an engagement.