Part 2: AIRA Issues New Standards for Distressed Business Valuation In this second article on AIRA Standards, the author discusses unique issues valuing distressed companies. These include the standard of value used, the premise of value, the intended use of the valuation, and cost of capital. The author also discusses the use and level of acceptance of the Industry Risk Premium (IRP) in the bankruptcy/reorganization context. In 2004, The Association of Insolvency & Restructuring Advisors (AIRA) launched the Certification in Distressed Business Valuation (CDBV). The AIRA Board approved Standards for Distressed Business Valuation to improve the consistency and quality of…
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AIRA Issues New Standards for Distressed Business Valuation In 2004, The Association of Insolvency & Restructuring Advisors (AIRA) launched the Certification in Distressed Business Valuation (CDBV). Before the inception of the CDBV program, there was no professional designation to recognize those skilled and experienced in distressed business valuation work or expert valuation testimony in bankruptcy litigation. Given the increasing number of professionals who are performing business valuation engagements, the AIRA Board approved Standards for Distressed Business Valuation to improve the consistency and quality of practice among its members. The aforementioned standards became effective March 1, 2014. Michael Pakter, a NACVA…
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Consider Three Types of Private Preferred Stock Transactions, Each with Varying Degrees of Relevance to an Indication of Fair Value: Simple, Strategic, and Tranched Preferred Financing Last year, the AICPA issued guidance on evaluating private transactions with regards to their relevance in estimating the Fair Value of other securities within an enterprise via the back-solve method. The McLean Valuation Services Group recaps that guidance and explains what it should mean in practice. Appraisers need to carefully follow specific criteria and they need to exercise reasonable judgment.
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Tips for Family Businesses to Survive and Thrive When Tough Times Hit Can You Revive Your Distressed Family Business? The first step to figuring that out, Steven F. Agran explains, is an objective assessment of cost structure. What determines whether a business can be cash flow positive at current sales levels or even at lower levels, if sales continue to decline? Find out here.