Monthly Archives: June 2009

The Whole or the Sum of the Parts?

I often reread Revenue Ruling 59-60 just to see if I can gain any new insights. In my latest reading, I was struck by its emphasis on valuing individual estate or gift assets and the fact that it says nothing about valuing a the assets as a collection or portfolio. This is because the valuation [...]

Posted in IBA Blog | Leave a comment

Conflicting Realities

Let’s start with a pair of conflicting realities:
1. Value is a range.
Maybe it is a probability distribution (a range in which each value has a certain probability). Every so often it is a single number (usually when it is zero). Sophisticated techniques like scenario analysis, Monte Carlo simulation, option models, and statistical regression provide logically [...]

Posted in IBA Blog | Leave a comment

Using Sophisticated Valuation Models

At last week’s IBA-NACVA Superconference, I attended noteworthy presentations on sophisticated and complex valuation models, including Butler-Pinkerton (for the company-specific equity risk premium), Finison-Dailey (same) and an overview of lack of marketability discount methodologies. [These presentations and more are available elsewhere on this website.]
After these presentations, several people asked me whether I use these models. [...]

Posted in IBA Blog | Leave a comment