A Review of the Basics for Lost Profits (Part V) This is the fifth article in a series reviewing the basics for lost profits. When calculating lost profits, some assignments will show results with future lost profits. The future lost profits must be discounted to a present value. This article will review issues relating to discounting future lost profits to their present value. The topics discussed will be (1) from what date to discount losses, (2) ex ante and ex post approaches, (3) modeling or not modeling projections of future losses, and (4) the appropriate discount rate. This is the…
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A Review of the Basics for Lost Profits (Part II) In this second part of our series reviewing the basics for lost profits, we will contrast the differences between valuing a lost business and calculating an ongoing business’s lost profits. Because many experts calculating lost profits also provide business valuations, both in and out of litigation, it is good to be reminded of the similarities and differences between these two approaches when assessing commercial damages. In this article, we review five key categories that separate the approaches for calculating lost profits from valuing a lost business. It also is a…