I work with a large network of local business brokers. I get a lot of referrals from them. In the course of talking with them, one asked me why we (appraisers) do not seem to use seller’s discretionary income (“SDE”, or earnings before owner’s compensation, interest, and tax expense) very much in our appraisals. After [...]
Duff & Phelps featured on 11/9 edition of CNBC’s Mad Money, with Jim Cramer
In an eight-minute segment last Monday, Cramer described the financial advisory firm Duff & Phelps’ service portfolio, the firm’s financial health, and went on to explain why independent valuation experts are in such demand.
IBA has the Duff & Phelps data you need [...]
In assignments involving taxation, appraisers are required to opine a single number – a point estimate – of fair market value. Revenue Ruling 59-60 defines fair market value as “the price at which…” (Italics added). Taxpayers must enter one value number on their returns to calculate their tax liabilities.
In most cases, however, value is uncertain. [...]
Some appraisers argue that lack of control discounts (LOCD’s) for asset classes held in a pass-through entity (say an FLP) are unique: 2% for cash and equivalents, 5% for bonds, 7% for stocks, and so forth. (The specific numbers are examples only.)
I do not agree with this for three reasons.
In a pass-through entity, all assets [...]
This post discusses the application of statistical methods when using the Market Approach. It emphasizes understanding the importance of sample size and how it affects the reliability of conclusions drawn from small samples. I hope that it helps you should you need to use or rebut statistically-based conclusions.
As an introduction, the Market Approach draws on [...]
