Approaches and Methods This third of a five-article installment discusses the application of the unit valuation principle. The discussion continues with a summary of the generally accepted unit valuation approaches, methods, and procedures. Read Part I here. Read Part II here. Introduction This installment is part three of a five-article series related to the unit valuation principle for ad valorem property tax purposes. Part I summarized what analysts need to know about the application fundamentals related to the unit principle valuation of complex, utility-type properties for property tax compliance, administration, and controversy purposes. Part II explained when it was appropriate…
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When to Apply This second of a five-article installment discusses the application of the unit valuation principle. Guidance is provided for when to apply the unit of valuation principle. Read Part I here. Introduction This discussion is the second installment of a five-part series related to unit principle valuations prepared for property tax compliance, administration, and controversy purposes. As was introduced in the first installment, the unit principle is often applied to collectively value a large assemblage (or a unit) of taxpayer property. This principle is typically applied to value complex, utility-type property that is physically, functionally, and economically integrated.…
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For Financial Reporting Purposes In this article, the author revisits the Market Participant Acquisition Premium (MPAP) issued by The Appraisal Foundation and reiterates the findings regarding what is a premium and what that means.
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The consistent theme of the Appraisal Foundation’s exposure draft The Measurement and Application of Market Participant Acquisition Premiums is that acquirers do not value control for its own sake, but rather for the tangible economic benefits that can be achieved by the exercise of control. Travis W. Harms, Mercer Capital Financial Reporting Valuation Group lead, explains the analyses and discusses his views. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Five Variations on a Theme: Analyzing Transaction Premium Data (Part 1). This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. …
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The Appraisal Practice Board of the Appraisal Foundation released The Valuation of Customer-Related Assets. As Karolina Calhoun, senior financial analyst with Mercer Capital, explains, the non-authoritative best practices guidance elaborates on valuation approaches and methodologies that can be used to measure fair value of customer-related intangible assets. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Appraisal Foundation Releases Final Guidance on Fair Value Measurement of Customer-Related Assets. 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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Nuances Valuing and Normalizing an Auto Dealership There are many reasons an auto dealership may require a business valuation; buy-sell agreements, shareholder disputes, employee stock ownership plans (ESOPs), and estate planning and gifting strategies. In many instances, there will be an opposing party that questions the validity of the final value, whether it be a dissenting stockholder or the Internal Revenue Service. It is imperative the dealer be aware of the basic characteristics of a valuation so the dealer is able to make sure the valuation analyst is using sound judgments and that, if challenged, the value will be defensible.
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Buyers do not offer premiums simply for the sake of gaining control, but rather, through exercising the prerogatives of control, those buyers expect to generate economic benefits. Travis W. Hams, leads Mercer Capital’s Financial Reporting Valuation Group, looks at the Appraisal Foundation’s white paper on the subject of JAB Holdings’ acquisition of Keurig Green Mountain. To read more about the results of this report in the Mercer Capital’s Financial Reporting Blog, click: Single-Serve Control Premium? 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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How we define tangible and intangible assets is paramount to accuracy and fairness in valuation. In this article, Dr. Carl Sheeler, responds to a September 9, 2013 concept paper authored by Rick Baumgardner, Chair of the Appraisal Practices Board of the Appraisal Foundation, titled “Valuation Issues in Separating Tangible and Intangible Assets.”
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There Are Different Standards. They Have Different Places in Various Appraisals. Here’s Why. Jim Hitchner considers various responses to the query: “When valuing an operating company, is it necessary to mention USPAP in addition to SSVS 1 when talking about the standards adhered to?” Good question. There were lots of answers from various valuators in a recent discussion. Here’s Jim’s take on it all.