An impressive lineup of speakers will be at the fourth OIV Business Valuation International Conference at Bocconi University (Aula Magna) in Milan, Italy, on November 30. The theme of the conference is Fairness Opinion’s Value: Legal Protection or Deal Improvement? There is no admission fee for the conference, which is presented by the Organismo Italiano di Valutazione (OIV), the Italian business valuation standard setter. Here’s the agenda:
- Mario Massari (OIV)
- 9.30am – 10.30am Fairness opinions and Italian Valuation Standards (PIV), Mauro Bini – OIV
- 10.30am – 11.30am How can fairness opinions provide value to shareholders?, Jay Fishman – Financial Research Associates
- 11.30am – 11.45am Coffee Break
- 11.45am – 12.45pm Fairness opinion and conflicts of interest, Jim Wolf – Ernst & Young (retired)
- 12.45pm – 2.00pm Lunch Time
- 2.00pm – 3.00pm The different role of fairness opinions in different types of deal, Jeff Tarbell – Houlihan Lokey
- 3.00pm – 4.00pm Valuation methods in fairness opinion, Gil Matthews – Sutter Securities
- 4.00pm – 5.00pm Dual fairness opinions and the role of valuation firm, Jeff K. Davis – Mercer Capital
There will be simultaneous translation provided in both English and Italian. While there is no charge for attendance, you must register on the OIV website. You can find the link on BVR’s Global Business Valuation Resource Centre if you click here.
The best young CPAs in the areas of forensic accounting and business valuation were honored at the AICPA FVS 2015 conference in Las Vegas. The 32 CPAs are 40 years old or younger and are the first honorees in the new annual Standing Ovation Recognition Program, which recognizes outstanding professional achievement in various specialty credential areas. The honorees are (listed alphabetically):
- Jamila Abston – U.S. SEC, Atlanta, GA
- Travis Armstrong – Hemming Morse, LLP, San Francisco, CA
- Tim Bryan – Crowe Horwath, LLP, Sacramento, CA
- Jeffrey Buchakjian – EisnerAmper, Philadelphia, PA
- Brian Chmiel – Crowe Horwath, LLP, Chicago, IL
- Anna Cicirello – KPMG, LLP, Toronto, Ontario
- Jonathan Couchman – Veris Consulting, Inc., Reston, VA
- Timothy Cowley – Puckett, Clement and Schellenberg, P.C., Troy, MI
- Randie Dial – CliftonLarsonAllen, Indianapolis, IN
- Michael Fahlman – Berkely Research Group, Phoenix, AZ
- Nathan Fan – Hemming Morse, LLP, Los Angeles, CA
- Rachel Flaskey – Baker Tilly, Minneapolis, MN
- Carleen Gaskin – WithumSmith+Brown, PC, Paramus, NJ
- Luke Houston – Rocky Mountain Advisory, Salt Lake City, UT
- Robert King, Jr. – The Koerber Company, P.A., Hattiesburg, MS
- David Kirk – Baker Tilly, Dallas, TX
- Adam Lang – BerkowitzPollackBrant, Miami, FL
- Ethan Lee – Pacific Business Valuation, Honolulu, HI
- Nicole Lyons – WithumSmith+Brown, PC, Princeton, NJ
- Jason MacMorran – Postlewaite & Netterville, Baton Rouge, LA
- Shaun Maloney – EisnerAmper, Frelin, NJ
- Robert Mundy – Pershing Yoakley & Associates, Atlanta, GA
- Phillip Nathan – FTI Consulting, Washington, D.C.
- Natasha Novikov – FBI, Maitland, FL
- Jennifer Prager – Morones Analytics, LLC, Portland, OR
- Jack Schwager – FTI Consulting, Chicago, IL
- Amanda Sexton – Albrecht, Viggiano, Zureck and Co., Hauppauge, NY
- Tatyana Shtyrkova – Hemming Morse, LLP, San Francisco, CA
- Sameera Totagamuwa – CliftonLarson Allen, West DesMoines, IA
- Paul Weisinger – Walthall CPAs, Cleveland, OH
- Nicole Wells – FTI Consulting, Chicago, IL
- Jason Woon – KPMG, LLP, Seattle, WA
More coverage of the AICPA FVS 2015 conference will appear in BVWire (free registration).
A reminder that BV is an international profession: Today is the concluding day of the Saudi Arabian The Reality and Future of Business Valuation in KSA business valuation conference in Rhiyad. The conference is organized by TAQEEM, the Saudi Authority for Accredited Valuers.
Some highlights of the conference:
- Soltan Al Jorais (pictured) covered the draft regulations for the profession in Saudi Arabia and much of the Arab-speaking world, including the levels of membership, the education and practical experience requirements;
- Mary Jane Andrews covered the International Valuation Standards, both technical standards and professional standards (TAQEEM has translated the IVS into Arabic as an IVSC member service); and
- Michael Badham provided an overview of the content of the courses jointly provided by TAQEEM and IIBV.
TAQEEM has the attention of the Saudi government—this high-level attention is evident in the Ministry presentation included in this Youtube clip in Arabic. They’re doing a great job of collaborating with IIBV and others to develop the “business valuation ecology” necessary to support strong professional practices and standards.
BVWire includes a report from Las Vegas and the annual Advanced Business Valuation conference of the American Society of Appraisers (ASA). Linda Trugman (Trugman Valuation Associates, Inc.), the international president of the ASA, welcomed the 750 attendees to the event, which was actually two conferences—one for business valuators and the other for appraisers of real estate, gems, art, and antiques. Total attendance was up from two years ago (the last time these appraiser groups got together). Of the total attendees, about 425 were business valuation experts, which is 20% more than last time.
“This is not your father’s ASA,” Bill Johnston (Empire Valuation Consultants), chair of the BV committee, said in his update on what’s going on at the organization. He was referring to current modernization efforts. For example, the ASA is updating many education courses and will have all of its BV certification training online next year. It also has a new technical committee that will put out several papers on technical issues by the end of the year. These are not large papers such as those put out by The Appraisal Foundation or AICPA but smaller ones on niche topics that may be considered controversial. The ASA also has some free webinar forums coming up for members in an ask-the-experts format, the next one being on S corps. Johnston also mentioned the new credential that’s in the works for fair value measurement for public companies in the U.S. The ASA, along with AICPA, RICS, and other stakeholders, are part of the effort by the valuation profession to work together to develop a common set of standards and practices with respect to these new credentials.
Here are some takeaways from some of the early sessions:
- Keynote speaker G. Scott Clemons (Brown Brothers Harriman) pointed out that current U.S. monetary policy and low interest rates are coming to an end as the Fed mulls a move back to more normal monetary policy.
- The lack of a clear explanation in a valuation report is a big red flag for IRS agents looking to pull estate and gift tax returns for audit, says Theresa Melchiorre, who is with the IRS Office of the Associate Chief Counsel.
- If you have questionable management forecasts for an ESOP valuation, ask the trustee to get a quality of earnings report, advises attorney Ted Becker (Drinker Biddle & Reath LLP).
- Using decision tree modeling instead of traditional probability weighting results in a 20% higher calculation of IP damages, according to a case study presented by John Taylor and Yuka Itami, both with Houlihan Lokey.
For more from the ASA conference, see BVWire (free registration required).
Yes, says the Delaware Chancery in the Dole shareholder litigation, according to the BVWire. The precise issue was whether Dole could designate its financial advisory firm as its valuation expert, as opposed to the individuals who wrote the expert report. Even though the Delaware Code includes provisions that “appropriately personif[y]” corporations, companies, and firms in certain commercial and economic contexts, “the Rules of Evidence make clear that a witness must be a biological person,” the court said [In re Dole Food Co., Inc. Stockholder Litigation, 2015 Del. Ch. LEXIS 47 (Feb. 27, 2015)].
Please take a few moments to share your experiences on how you use Monte Carlo in your business valuation practice—if at all. The new Monte Carlo survey from BVR is online. We’ll be collecting responses for the next week. All responses are confidential, and respondents have the option of receiving the final results as soon as the survey closes. There is a lot of talk about Monte Carlo—we’d like to know whether appraisers find it helpful. Thanks!
The IVS were originally released in 2004 as a 400-page set of guidances at varying levels of detail. They were surprisingly quickly adapted by a variety of national valuation organizations in developing countries—largely because they were the only international standards available.
The first major revision, designed to shorten the document and focus on principals, was released in 2011.
Volunteers and staff (many of them “donated” by the Big Four accounting firms) have worked together via the IVSC Standards Board. A great deal of joint work on the update was accomplished in the public forums conducted the last two days on the outskirts of Paris. “We are very intent to not loose momentum,” said Sir David Tweedie, the IVSC chair of the board. Tweedie was re-elected as chair for the next three years as well, so he’ll be continuing his term. His background in leadership in international accounting standards makes him something of the ideal candidate to continue to advance the cause of global business valuation standards.
The exposure draft of the newest update is planned for January 2016, followed by a three-month review period. Standards Board chair Greg Forsythe says that the updated IVS should be effective by early summer 2016.
This timetable is somewhat more critical for the many emerging valuation professional organizations (VPOs) than it is perhaps in North America, where USPAP, SSVS-1, and the CICBV standards are already “competing.” However, the various certifying organizations that currently comply with other established standards (CICBV, AICPA, ASA, NACVA, IACVA, and many more) will obviously benefit by working to maintain and improve alignment, if not coincidence, with the IVS.
In addition, efforts by the joint TAF working group to develop a certification in valuation for financial reporting or IIBV to create an additional certification for cross-border appraisal expertise will obviously need to stay closely aware of what IVS has to say.
“I’m an optimist,” said one IVSC trustee. “The road to conformance [of international standards] is long and hard, but we’ll get there.”
Spurred on by a description of the valuation profession in Slovenia (where the appraisers are under review by the same regulatory body that regulates auditors), Adam Smith from PwC (on partial loan to the IVSC Standards Board) comments:
In the U.S. and most of Europe, I have to question whether we’re even a profession. Anyone can put up a sign at any time with no review and call themselves a business valuator. It’s not a surprise that there are calls from outside the profession for standardization.
Smith recognizes that this is hard for new national professional organizations or particularly those that are already established. “That’s why the IVSC creates standards that are global and can be followed, or should be followed, while still allowing flexibility. This is required to meet the needs of their constituents, since there’s no way now to have one size fits all. It’s ironic because the concepts of valuation, math, and finance are universal,” he ventured.
Speaking at the “Lively Debate” session in Paris sponsored by the IIBV, Smith said that “the intensity of the volunteer work is now supported by the direct financial support of large firms, VPOs, and others around the world, so we will make it to the finish line eventually.” Others agreed, particularly Doug McPhee, the global valuation director from KPMG. “The mood has changed hugely in the last 12 months. More people are involved, and more people are doing the hard work to take the business valuation profession to the next level.”
Smith pointed to the fact that he, in fact, is paid for his work on behalf of the profession. “It’s PwC who is footing the bill for my work,” he said. And McPhee referred to The Appraisal Foundation’s great BVRoundtable in Washington, D.C., last week. “I travel the globe, and people are working hard at applying standards internationally everywhere I go. It’s exciting, and very lively!”
The International Institute of Business Valuers is hosting today’s “Lively Debate” to end a day of working sessions at the Paris annual meeting of the IVSC. To make sure that the conversation is energetic, director Michael Badham offers the following selection of valuation-specific opportunities to imbibe. Feel free to add your suggestions for the BV Drink of the Week club … though it may be hard to do better than an alcoholic drink called “Discount for Lack of Control!” Two Truths & A Lie Panel Discussion Drink Menu
Appraisers who don’t have a lot of experience having their work reviewed by auditors often find it a terrifying (and depressing) experience. There isn’t a lot of guidance on what to expect and what to offer. One simple and helpful summary of best practices has been released by the International Valuation Standards Council: A Guide to the Audit Process for Professional Valuers. It’s available for £10 from the IVSC bookstore.
Incidentally, the International Valuation Standards (IVS) are also available at this bookstore for £40. The current version was released after substantial revisions (to make them shorter) in 2013; IVSC intends to release the next update in 2016.