Federal Rules and Regulations Governing ESOPs Business valuation reports of employer’s securities owned by ESOPs are subject to review by plan fiduciaries, government agencies, and IQPAs auditing the ESOP’s financial statements. Each of these readers have their own responsibilities to the participants and beneficiaries of the plans. This article will examine the federal rules and regulations governing ESOPS ...

A Nuanced Approach to Asset Valuation Marketability refers to the ease with which an asset can be sold, and the DLOM accounts for the reduced liquidity of an asset that is not easily traded in the open market. In business valuation, the DLOM is a critical yet contentious adjustment. This article discusses the underlying issues presented in this type of valuation and uses an example to explain the incrementa ...

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 ...

What is the #1 thing on your website that will convince a prospect that your firm is the right choice for a project? Rod Burkert shares his views on what is needed to go from zero to hero and land that engagement. Imagine I am a prospect for getting your BVFLS services. I found you on Google or LinkedIn. Or maybe I saw an article you wrote. Maybe heard a presentation you gave. Or maybe I got a recommendatio ...

A Key Formula Used in Business Valuation Net working capital is a crucial component of business valuation since it impacts both a company’s enterprise value via its projected cash flows and its equity value via excess or deficient net working capital levels as of the valuation date. In addition, net working capital for valuation purposes is more nuanced than simply taking current assets minus current liabil ...

The Principles of Conservatism in Action Most business owners understand the industry in which they operate and tend to be good at running the day-to-day operations. Yet, that does not mean they have made optimal decisions or that they have the necessary controls and financials in place that enable them to make sound financial decisions. Companies that do not keep high quality data will likely have a lower ...

Factors to Arrive at a Value that are Beyond the Three Approaches This article addresses valuations for buy/sell transactions with private buyers and private sellers. A business owner calls and says: I want to sell my business. Can you tell me what it’s worth? Thousands of these transactions are occurring daily. But before you go any further, stop and ask more questions. As business valuators, we are condit ...

How to Manifest a Better, More Fulfilling Valuation Practice Several months ago, a friend of mine gifted the article’s author a book entitled The Seven Spiritual Laws of Success: A practical guide to the fulfillment of your dreams, written by Deepak Chopra. A few of the sections within the book hit home more than others and the excitement that has inspired the author to write the article herein. The author ...

The Perils of a Party Doing their Own Business Valuation in a Dissolution Action Kwak v. Bozarth is an unpublished Massachusetts case. The trial court made several decisions based on unavailable data. The case illustrates the perils of a party in a martial dissolution acting as their own expert and underscores the importance of how the standard of review affects an appellate panel’s review of the trial cour ...

(Part V) To look to the future of the BV profession, we must explore the relevant dynamics within the industry. That starts with looking to our past to see what events and milestones brought us to where we are today, followed by ascertaining the economic and demographic trends leading us into the future, and culminating with identifying those trends which will have the greatest impact upon the profession. N ...

(Part IV) To look to the future of the BV profession, we must explore the relevant dynamics within the industry. That starts with looking to our past to see what events and milestones brought us to where we are today, followed by ascertaining the economic and demographic trends leading us into the future, and culminating with identifying those trends which will have the greatest impact upon the profession. ...

Structured, Clear, and Well-Researched and Reasoned In a litigation setting, a well-written business valuation report can position your conclusion of value as credible. When completed for tax purposes, a well-written business valuation report can help avoid an IRS challenge. In any circumstances, a well-written business valuation report can provide the business owner with ways to increase cash flow and redu ...

An Interview with Zain Kalson, founder of Etheia As part of a broader dialogue around business valuations in the context of divorce, this article features an interview conducted by Andrew Thompson, Esq., with Zain Kalson, the founder of Etheia. The article discusses trends regarding how advanced data analytics are helping attorneys and experts sort through hidden assets, analyze expenses, and improve outcom ...

Tests of Reasonableness Business appraisers use tests that ask whether decisions made are legitimate and designed to remedy a certain issue under the circumstances. These tests are commonly referred to in the valuation literature as tests of reasonableness. Several methods have been suggested and employed (e.g., purchase justification test), but limited literature speaks to the use of a test of reasonablene ...

(Part III) To look to the future of the BV profession, we must explore the relevant dynamics within the industry. That starts with looking to our past to see what events and milestones brought us to where we are today, followed by ascertaining the economic and demographic trends leading us into the future, and culminating with identifying those trends which will have the greatest impact upon the profession. ...

The Use of Hypotheticals to Illustrate What Is Known or Knowable In valuation, the concept of “known or knowable” refers to events or circumstances that are (or are not) known or able to be known as of a specific date. This concept is important in the valuation process because every valuation is performed as of a particular point in time, which is referred to as the valuation date. Because the valuation pro ...

(Part II) To look to the future of the BV profession, we must explore the relevant dynamics within the industry. That starts with looking to our past to see what events and milestones brought us to where we are today, followed by ascertaining the economic and demographic trends leading us into the future, and culminating with identifying those trends which will have the greatest impact upon the profession. ...

A Deeper Inquiry to Better Understand Risk and Performance Key performance indicators (KPIs) can provide business valuation better insight regarding the risk profile of the company, revenue drivers, forecasts, and performance of management in the market served. In this article, the author provides insight regarding what metrics are potentially available to better understand a firm that is being valued. When ...

To look to the future of the BV profession, we must explore the relevant dynamics within the industry. That starts with looking to our past to see what events and milestones brought us to where we are today, followed by ascertaining the economic and demographic trends leading us into the future, and culminating with identifying those trends which will have the greatest impact upon the profession. NACVA set ...

To Turn Worthy Dreams into Valuable Legacies This article features an interview where, Nataliya Kalava, CVA, ABV, MAFF, of American Valuations, interviewed Brian Stephens, MBA, CMAP, CVA, CBI, CEPA, of Legacy Business Sales and Acquisitions. Brian’s mission is to inspire and empower great people to turn worthy dreams into valuable legacies. During this conversation, the authors of this article discuss the m ...