Business Valuation and Forensic Accounting

The business valuation and forensic accounting disciplines often are required when valuing a  closely held business for divorce and shareholder disputes. Controlling shareholders may attempt to minimize income and cash flow  and understate assets in order to minimize the amount of cash required to pay minority shareholders or divorcing spouses. Valuation and Forensic experts  are able to uncover these type of financial misstatements and make adjustments to correct these intentional errors to avoid undervaluing the closely held business involved in the litigation. [Read more…]

The Yardstick Method To Measure Economic Damages

The Yardstick Method is a tried and true way to measure economic damages in contract, patent infringement, and other tort claims. In a nutshell, this method is based on comparisons with similar type business in the same industry.    In damages cases the financial experts are hired to assist the court in estimating what a plaintiff might have earned ” but for” the defendant’s alleged wrongdoing. In order to withstand financial scrutiny, experts must base their estimates on real world comparable evidence and not pure speculation. [Read more…]

Valuation of Family Businesses Can Pose A Challenge

Family-owned businesses are not usually run like large public companies and working together can bring out the best and worst in a family owned business entity. Here are four Key questions that business valuation professionals ask when valuing a family owned company. [Read more…]

ACFE 2017 Global Fraud Study – The Staggering Cost of Fraud

Organizations worldwide lose an estimated 5 percent of their annual revenues to fraud, according to the 2017 ACFE Report to the Nations on Occupational Fraud and Abuse. Fraud takes many shapes and forms, among them corporate fraud, consumer fraud, tax fraud, identity theft and many others. [Read more…]

United States Treasury Withdraws Proposed Changes to IRC Regulation 2704

Business valuation  professionals  and estate planning attorneys can take a sigh of relief as United States Treasury Secretary, Steven T. Mnuchin, on October 2, 2017 proposed that the changes to Internal revenue Code Section(IRC) 2704 be withdrawn. The changes to this IRC regulation could have effectively eliminated discounts for lack of control and discounts for lack of marketability in family owned businesses. [Read more…]

New Tennessee Law on Discount for Lack of Marketability in Tennessee Divorce Valuation

The use of a marketability discount in Tennessee divorce valuations has been a source of some confusion based on court rulings. A recent amendment to the Tennessee Code will provide clarity to business valuators who prepare divorce valuations in Tennessee. [Read more…]

The Importance of Ratio Analysis in Business Valuation

One of the most important procedures done in preparing a business valuation is the ratio analysis of the subject company’s financial statements. The calculation and review of financial ratios will assist the valuation analyst in determining the strengths and weaknesses of the company. [Read more…]

The Importance of Selecting the Right Forensic Accountant

One of the most important decisions an attorney involved in a complex litigation will have to make is the selection of a forensic accountant as a consultant or as an expert witness. The specialized training and expertise of a forensic accountant can make a significant impact in the successful outcome of a case. [Read more…]

The Importance of Industry Research in Valuing a Business

Many times the industry outlook section of a business valuation report is not given the appropriate attention it deserves. Conducting a detailed industry analysis will provide the valuation analyst with the required knowledge needed to determine an appropriate conclusion of value. [Read more…]

ACFE 2016 Global Fraud Study – Fraud In Small Business

Anti-fraud professionals, business managers, government and regulatory agencies, and the media each have a vested interest in assessing the total amount of money lost to fraud each year. While many studies have attempted to determine the extent of fraud’s financial impact, the challenges in arriving at the true total cost of fraud are numerous. [Read more…]