Fresh Opportunities and Risks to Consider When Modeling From accelerated expensing to revamped Qualified Small Business Stock rules, the OBBBA has shifted both the numerator (cash flows) and the denominator (risk and discount rates) of the valuation equation. The result is a more dynamic environment—one with fresh opportunities, but also new pitfalls. With the passage of the One Big Beautiful Bill Act (OBBB ...

Dissecting the Impact on Valuation Drivers What impact, if any, will the imposition of tariffs have on the valuation of assets? How will the imposition of tariffs impact modeling? In this article, the author shares his thoughts on the various factors and industries that valuation professionals must weigh to prepare a valuation. Economic Uncertainty in Valuation Economic uncertainty arises when key macroecon ...

Valuing Liabilities Differs from Valuing Assets Valuing contingent/unliquidated liabilities raises some interesting questions. Do contingent/unliquidated liabilities have liability-specific risk? If yes, does liability-specific risk result in lower or higher obligations? Why do contingent/unliquidated liabilities related to lawsuits tend to settle as opposed to go through verdict and appeals? This article a ...

In Related-Party Cost Sharing Arrangements (Part II of II) This two-part paper demonstrates how the discount rate associated with the investment in intangibles developed under a cost sharing arrangement can be calculated using an analytical framework that explicitly considers variability of outcomes in profitability of the intangibles to be developed. Such framework is the probability-weighted scenario anal ...

In Related-Party Cost Sharing Arrangements (Part I of II) This two-part paper demonstrates how the discount rate associated with the investment in intangibles developed under a cost sharing arrangement can be calculated using an analytical framework that explicitly considers variability of outcomes in profitability of the intangibles to be developed. Such framework is the probability-weighted scenario analy ...

The Case for Use of a Risk-Adjusted Rate in Damages Cases Robert Dunn and Everett Harry laid out a process for modeling and discounting future lost profits to present value in their article, Modeling and Discounting Future Damages. Not all experts agreed with the position presented by Dunn and Harry. In March, we revisited modeling and its level of acceptance. This article revisits the more controversial po ...

  In case you missed it, Z. Christopher Mercer, ASA, CFA, ABAR, founder and CEO of Mercer Capital, was the keynote speaker at the American Academy of Matrimonial Lawyers (AAML) and the American Institute of CPAs (AICPA) 2014 bi-annual joint conference this year. His presentation concerned The Five Really Big Valuation Issues. They included: 1.) discount rates, 2.) control premiums and minority interest ...