The market approach to business valuation can provide excellent indications of value. While the mechanics of some market approaches are quite simple, the market approaches can also be easy targets for cross examination.
Continue reading “What Is the Most Important Aspect of the Market Approach To Business Valuation?”Should As Much Emphasis Be Placed on the Willing Seller As the Willing Buyer?
While it is important to consider a potential buyer’s positions in a business valuation, it is equally important to give consideration to the potential seller’s positions in a valuation.
Continue reading “Should As Much Emphasis Be Placed on the Willing Seller As the Willing Buyer?”What Valuation Considerations Should Be Made in Buy-Sell Agreements?
Values established by buy-sell agreements may be ignored, may be controlling, or be only a factor to consider in determining values. The Tax Court listed the following factors for making the buy-sell agreement price
Continue reading “What Valuation Considerations Should Be Made in Buy-Sell Agreements?”Are “Rules of Thumb” Useful in Business Valuations?
Rules of Thumb are generally expressed as multipliers. A common example would be that some particular type of business will sell for .75 to 1.50 times annual revenues. Another popular multiple is a multiple of discretionary earnings. For example, a particular type of business is said to sell for X times Seller’s Discretionary Cash Flow (SDCF), or Owner’s Cash Flow (OCF).
Continue reading “Are “Rules of Thumb” Useful in Business Valuations?”Characteristics of The Valuable Expert Witness
It has become common in business disputes and complex commercial litigation to hire expert witnesses to assist the attorney in preparing for deposition and trial. Attorneys will look for expert witnesses who possess all the following characteristics:
Continue reading “Characteristics of The Valuable Expert Witness”What Is Meant by “Premise of Value?”
The “Premise of Value” can refer to an assumption as to the status of the business under which a transaction is, or would be expected to occur. That is to ask, will the business be a going concern, will it be in an orderly liquidation, will it be as a forced liquidation, or will it
Continue reading “What Is Meant by “Premise of Value?””What Is a Certified Valuation Analyst?
A Certified Valuation Analyst (CVA) is a Certified Public Accountant (CPA) who has completed specialized advanced training in business valuations, and who has also completed
a comprehensive examination, case study, and submitted a complete written valuation report to examiners. CVAs are CPAs who
What Are Some Elements of a Well-Written Valuation Analysis?
When complete reports are essential, you need a Certified Valuation Analyst. Listed below, are elements of a well-written valuation analysis:
Continue reading “What Are Some Elements of a Well-Written Valuation Analysis?”What Considerations Should Be Made in Drafting Buy-Sell Agreements?
Drafting Buy-Sell Agreements requires that special consideration be given to a number of special rules that affect valuations for estate and gift tax purposes. For example, options to acquire property at less than FMV and restrictions on the right to sell property are generally disregarded
Continue reading “What Considerations Should Be Made in Drafting Buy-Sell Agreements?”Divorce Valuation: Should Discounts for Loss of a Key Person Be Considered?
In making a divorce valuation, it is generally not appropriate to apply a discount for the loss of a key person if there will be no change in management and no key people will be leaving the company. The divorce value is generally measured
Continue reading “Divorce Valuation: Should Discounts for Loss of a Key Person Be Considered?”
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