Alpha Company’s shareholders have a problem. One is retiring and needs to be bought out. The shareholders have agreed that Alpha will buy the shares (for cash). They also agree on the value of the stock before the buyout. Everything is cool, except for one thing. The remaining shareholders think the buyout price should be [...]
June 2-5, 2010 The Fontaineblueau Miami Beach
The Coming Tidal Wave
There will be over 800,000 middle market businesses with an estimated total value of $3.3 trillion disposed of between 2011 and 2029. Are you prepared to capitalize on this opportunity? Find out how from Dennis J. Roberts, CPA/ABV, CVA, CMAP in his revelatory presentation, “The [...]
Here’s a great question from a colleague: can I appraise using only tax returns (cash basis) when (accrual basis) financial statements are not available (and I am not qualified to prepare accrual statements, and /or my client is balking at the extra cost to prepare them)? Accrual-based statements are preferable because they give me a [...]
If H.R. 436 (the “Pomeroy Bill”) does not receive Senate approval, the IRS may propose equivalent (or stronger) regulations that, if enacted, could eliminate or severely curtail the use of valuation discounts. Discounts might be prohibited for passive holding entities (such as Family Limited Partnerships) owning assets such as cash and marketable securities. Discounts would [...]
Congress has failed (shamefully and spectacularly, IMHO) to fix federal estate taxes.
Those dying in 2009 had $3.5 million exemptions above which values were taxed at 45%. Asset values were fully stepped up. That meant that if an estate’s assets were valued at $5 million, the heirs’ basis was $5 million. This affects capital gains tax [...]
I am a dueling expert in my first contested divorce appraisal in several years. As such, it was interesting to reflect on the issues that have arisen. The subject interest is 100% equity in a security systems installation and monitoring company.
This case involves:
An unresolved valuation date (date of separation March 2009, financials furnished through September [...]
In the movie “Cool Hand Luke”, there is a scene in which the warden, holding his rifle, wearing his mirrored sunglasses, and standing atop a hill above Paul Newman, tells him that “What we have here is a failure to communicate!” That is the metaphor for this post.
How many times have you explained an appraisal [...]
Another theme of my posts has been the relevance of information obtained subsequent to the valuation date in fair market value appraisals. Revenue Ruling 59-60, Section 3, Paragraph 3 tells us that information known or reasonably knowable as of the valuation date is relevant and must be considered (and disclosed in our reports). “Information” is [...]
Much of my writing has a theme: avoiding the weighted average cost of capital (WACC).
In my opinion, WACC makes sense, but it is hard to use!
Capital, like labor and raw materials, comes from different sources, in different amounts, with different costs. If we know those amounts and costs, we can calculate their weighted average.
The problem [...]
In the final analysis, business valuation is all about trust. Many of the issues we confront (and that I write about) concern this fundamental topic.
If we could not trust financial statements, we would all have to become auditors, which would force us non-CPA’s to get a great deal of additional training and vastly increase the [...]
