When we apply the Justification of Purchase (JOP) test to check the reasonability of a value conclusion, we ask:
1. Can the business pay the owner-manager fair market compensation?
2. Can the business adequately service assumed and acquisition-related debt?
3. Can the business earn its owner a satisfactory return on investment?
There are many important assumptions implicit in the JOP test. If [...]
Earlier this month, Richard Fox of Fox Business Appraisels, LLC, delivered the IBA’s 2010 Stanton Memorial lecture presentation entitled, “Regression Analysis as a Tool for Validating Valuation Methodology”, in the IBA Symposium track during the 2010 NACVA/IBA Annual Consultants’ Conference.
Mr. Fox’s presentation focuses on the technical use of regression analysis to determine the validity of [...]
To define a valuation engagement, we need to establish its parameters:
1. The valuation date
2. The entity to be valued
3. The interest to be valued
4. The standard of value
5. The level of value (e.g. non-marketable minority)
6. The premise of value (e.g. going concern)
7. The user of the report (e.g. client and advisors)
8. The use of the report (e.g. gift taxation)
9. The critical assumptions (e.g. whether [...]
Those of us in solo or small practices cannot be all things to all people: we have to find our valuation niches. Everyone will have a different game plan for which niches they want to serve.
I have found it very helpful, at least once a year, to segment the market for business valuation services [...]
For many years I have delivered engagement letters, report drafts, and signed final versions electronically as PDF’s. I paste a PDF of my signature when needed.
For the very few who ask for signed hard copies, I print, sign and have Fedex / Kinko’s bind and mail them, at no additional cost to clients.
Go green, [...]
If you use graphs in your reports, please be honest in the way in which you depict your data. I wish I could embed sample charts in this post, but alas, I cannot. So please bear with me and envision the following data series: 100, 101, 102, 103, 104, etc. plotted by year.
Chart A graphs the [...]
THE INSTITUTE OF BUSINESS APPRAISERS (IBA) ANNOUNCES ITSÂ 2010 ELECTION RESULTS FOR THE IBA BOARD OF GOVERNORS, AND THE PROFESSIONAL RESPONSIBILITY, ACCREDITATION, AND EDUCATION BOARDS
Fort Lauderdale, FL —June 5, 2010—The Institute of Business Appraisers is very pleased to announce the electees for each of our four IBA Boards. They are as follows:Â
IBA Board of Governors
Professional Responsibility [...]
IRS Addresses IBA’s Comments on Appraiser Penalty Administration
Recently, the Institute of Business Appraisers received a response to several comments that IBA’s executive director, Howard A. Lewis, addressed in his presentation to the IRS on Appraisal Regulation and appraiser penalties. Mr Lewis previously served as national program manager for the engineering and valuation programs at the IRS.Â
IBA’s major recommendations were:
IRS should, at a [...]