Category Archives: Valuations

Timing is Everything: How to Handle Subsequent Events in Valuation

November 17, 2015 | Court Rulings, IRS Regulation, Tax Planning, Valuations

Business valuations are prepared as of a specific date, similar to balance sheets. Sometimes a valuation’s effective date is in the past, and events have occurred after the valuation date that would have impacted the company’s value if investors knew (or could have known) about them beforehand. These retrospective valuations are common in litigation and  Continue Reading »

How Industry Fits Into the Valuation Puzzle

November 13, 2015 | Business Plans, Uncategorized, Valuations

IRS Revenue Ruling 59-60 is an essential building block of modern appraisal practice. It identifies “the condition and outlook of the specific industry” as one of the factors to consider when valuing a private business. But how do investors measure industry risk and how does it fit in the valuation paradigm? Risk and Return Value is  Continue Reading »

No Place for Asset Appraisal in Trust Dispute, Court Says

November 13, 2015 | Court Rulings, Valuations

Cartwright v. Jackson Capital Partners, Limited Partnership, 2015 Tenn. App. LEXIS 361 (May 21, 2015) Did the appraiser use the wrong method for the case? This question took center stage in a lawsuit featuring the beneficiary of a grantor trust who claimed the trustee had deprived him of all the distributions to which he was  Continue Reading »

Lack of Evidence KOs Claim for Goodwill

November 3, 2015 | Court Rulings, Divorce Litigation, Valuations

Reedy-Huffman v. Huffman, 2015 Alas. LEXIS 56 (May 20, 2015) Hire a valuation expert. That’s the message the Alaska appeals court sent in a ruling involving a professional practice caught up in a divorce. The opinion also includes a good summary of the state’s position on goodwill. ‘Evidentiary void’: The husband was a licensed naturopathic  Continue Reading »

Business Valuations Are Not Commodities

October 30, 2015 | Business Plans, Financial Planning, Uncategorized, Valuations

Privately-held Maine business owners might need appraisals of their interests for many reasons, including: Small business loans, Strategic planning, Mergers, acquisitions and shareholder buy-ins (or buy-outs), Equitable distributions of marital estates, Minority shareholder disputes, Bankruptcy, and Gifts and estate planning. A business valuation is just a formality, isn’t it? Many Maine-based business owners only perceive formal  Continue Reading »

Reliable Experts Are Independent Experts

October 20, 2015 | Business Plans, Valuations

A financial expert witness builds on a solid foundation constructed by a reputable source to reach a reliable conclusion. At times, multiple sources are used to reach a conclusion, and these are the assumptions and sources underlying the expert’s opinion. However, in order to survive a Daubert challenge in federal court, an expert requires the  opportunity to  Continue Reading »

Valuing Intellectual Property

October 18, 2015 | Business Plans, Valuations

Many small businesses today have a significant amount of intellectual property as part of their value. Sometimes it can be difficult to actually place a value on this type of property. It can be hard to understand, as it’s often quite technical. Also, there are different types of intellectual property, and each asset is unique.  Continue Reading »

Valuators in Taking Case Disagree Over Measure of Damages

October 15, 2015 | Valuations

City of Baton Rouge v. Jay’s Donuts, Inc., 2014 La. App. Unpub. LEXIS 722 (Dec. 17, 2014) An expropriation case centering on taking a successful donut shop for public use raised fundamental valuation issues, such as the proper methodology for capturing the full extent of the owner’s loss. The city’s business valuator relied on fair  Continue Reading »

Financial Forecasts and Projections in Litigation

October 4, 2015 | Accounting Standards, Valuations

The efficacy of financial forecasts or projections that are used by an expert when they are making a valuation in a litigation proceeding is a point that can be missed. If these forecasts are off, they can be the cause of a large difference between experts. It’s important for an attorney and an expert to  Continue Reading »

What Do Business Valuation Standards Mean to Business Owners?

October 3, 2015 | Business Plans, Valuations

There is a growing need for valuation services among small businesses. There is a variety of reasons why business owners need to know the value of businesses, business interests and intangible assets, including sales transactions, financing, taxation, financial reporting and litigation. It’s critical for these business owners to use an appraiser who follows professional standards and guidelines, so  Continue Reading »