The standard of value sets the perspective of the buyer, of the seller, of the marketplace, and the specific property being valued. Without the proper understanding and application of the standard of value, the valuation
Category Archives: Business Valuations
Implementing Business Value Drivers to Sell Your Business at a Premium Price
When the time comes to sell your business, whether or not it sells at a premium price and makes you a profit largely depends on your commitment to cultivating business value drivers during your time as an owner.
What Are Seller’s Discretionary Earnings?
Accountants and lawyers often think of earnings in terms of “net profit” or “net after-tax income.” But, for closely held businesses, do those measurements tell the whole story?
Where Can You Find Comparable Sales Transactions for Valuing a Business?
There are different sources of transactional data available for valuation purposes. Shannon Pratt’s Done Deals, IBA’s Database of Sales Transactions, BIZCOMPS and Mid-Market Sales Transaction Reports are examples of information that is available.
The Importance of the Qualified Appraiser in IRS Tax Valuations
In a 2014 decision by the U.S. Tax Court (Estate of Richmond v. Commissioner T.C. memo 2014-26), the IRS was successful in imposing a 20% accuracy related tax penalty because the valuation on the estate tax return was less than 65% of the proper value as determined by the court (a substantial valuation misstatement).
What Is the Difference between Enterprise Value and Equity Value?
Sometimes people use the two terms interchangeably. However, for legal purposes there may be a significant difference in the two terms. Let’s assume your client is involved in a divorce action, and it is important to know the value of the business for settlement purposes.
Are Rules of Thumb Appropriate Valuation Methods for Litigation Matters?
Rules of thumb exist for several types of businesses. They were developed by business brokers over time, based upon actual sales transactions involving businesses in a particular industry. While a rule of thumb can provide buyers and sellers of businesses with an
What’s the Difference Between an Expert Consultant and Expert Witness?
As an expert consultant, the CPA/CVA/CFE is engaged to develop information that will be used by the attorney in a variety of ways, including settlement negotiations with the opposing side. In these instances, the CPA/CVA/CFE is usually not expected to testify or to develop an opinion that will be entered in to the court records.
Family Limited Partnership Discounts May Be at Risk in the Future
The IRS enacted in 1990 Internal Revenue Code Section 2704 to eliminate what was considered to be valuation abuses in family asset transfer transactions. The overall goal of this code section was to require the valuation analyst to ignore any provision in agreements that transferred a partnership interest or privately held stock interest to familyContinue reading “Family Limited Partnership Discounts May Be at Risk in the Future”
Is the “Capitalization of Excess Earnings Method” Reasonable for Determining Goodwill in Divorce Valuation?
In divorce valuations, no sale exists to measure the price paid for the business, so a residual method is not appropriate when parties with adverse economic interests cannot agree. Many times,
Janicek Valuation & Forensic Services, PLLC 