Documenting the economic benefits of IP
Robert Reilly (WMA) says it’s worth simply outlining the economic benefits of a firm’s IP in any valuation report where intellectual property is material “even if it’s only that it’s better to have a license than not have one.” He usually recommends a simple bulleted list of a few items under headings such as: increased [...]
Free downloads continue to popular with business appraisers
BVR provides over 90 free articles, papers and standards written by top experts in the field of business valuation. The top ten downloads last month were: FORM PREM14A EF Johnson Technologies, Inc. – EFJI Historic Trends in Private Company Valuation Multiples The Top 5 Free Sources of Automobile Dealership Industry Information Reasonable Compensation Data Sources [...]
BizMiner adds new items to its Industry Financial series
BizMiner recently finalized the mid-term expansion of its Industry Financial series. All reports in the series now have two additional line items to clarify Fixed Assets in the balance sheet. Net Fixed Assets is now broken out into: Gross Fixed Assets, (less) Accumulated Depreciation and Net Fixed Assets. The new items appear directly in the [...]
BVR congratulates Sean Saari of Skoda Minotti
Sean Saari, CPA/ABV, CVA, MBA recently received the 2010 Jeffrey R. Salins Report Writing Award from the National Association of Certified Valuation Analysts (NACVA). The award, given each year to one of NACVA’s 7,500 members, acknowledges superior work in preparing a business valuation report.
Professor Damodaran invites BVR readers to class
Aswath Damodaran, Professor of Finance at the Stern School of Business at NYU, has started teaching another year of corporate finance and valuation. And, according to a recent post on his blog Musings on Markets he is “just as excited as I was the day that I taught my first class” in 1986. Quoting Damodaran, [...]
What is a good number of comparable transactions?
Stacey Collins posed this tough question to the last panel of the day at the BVR Divorce Summit. Kevin Yeanoplos said that he found “one perfect comp, I’d use it. It’s not a matter of how many, but the quality of the data, and our judgement of how good it is.” Collins agreed that [...]
Rataj and Yeanoplos provide some practical guidelines for calculating reasonable compensation
Today’s session on reasonable comp started out with agreement that there is no standard definition that works in all situations. Kevin Yeanoplos (Brueggeman and Johnson Yeanoplos) said his working theory is that reasonable comp is the number he’d have to pay to hire some one to do exactly the work an owner is doing. [...]
Three fallacies when tax-affecting
If you’re confused about whether to tax-affect or not, at least consider some of the variables that Mark Harrison considers that undermine the “29.4% benefit” that seems to often appear post-Bernier and Delaware MRI. Harrison suggests at a minimum that you consider the three following adjustments to this standard methodology: Few private companies pay the [...]
Why do companies issue restricted stock?
When using restricted stock studies, you need to ask this question. It can influence the discount, points out Jay Fishman. Discounts are smaller if redemption is likely to be soon, of course, but the transactions that supposedly “arms length” may, in fact, turn out to have some sort of insider or warrant or other [...]
Is a private company always less marketable than a public company?
“We tend to think so,” argues Jay Fishman, speaking at today’s BVR Divorce Summit. But, if fact, “no one ever calls their broker and says ‘I want to sell 100% of Ford’.” Selling large blocks of public shares, as Ashok Abbot has shown, has many discounts built in–and is subject to oversight from PCAOB, FASB, [...]
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