Business Valuation

Fair Value: Challenges to the Private Equity Industry

The private equity (PE) market (including venture capital, buy-out, mezzanine and similar longer-term, illiquid investments) has expanded exponentially over the past 10 years. U.S. GAAP requires private equity (PE) investments be stated at fair value. Given the nuances inherent in PE, there can be significant challenges in determining the fair

Business Bookshelf

Business Valuation and Taxes: Procedure, Law, and Perspective by David Laro and Shannon P. Pratt 450 pages; hardcover; $85.00 John Wiley & Sons, Inc. Hoboken, New Jersey, 2005 ny CPA/ABV preparing a business valuation (BV) has undoubtedly heard of U.S. Tax Court Judge David Laro and valuation pioneer Shannon Pratt.

Get Your BV Niche Out There

EXECUTIVE SUMMARY CPAs WHO SEEK TO DEVELOP A BV NICHE should first determine the areas in which the firm can demonstrate expertise to referral sources. Prospects want to know that a firm understands their business. CPAs need technical training and specific valuation credentials to become credible providers of BV services.

Medical Practices: A BV Rx

EXECUTIVE SUMMARY CPA/ABVs NEED TO BE AWARE that a market-data approach to valuing medical entities is easy to follow but may yield less meaningful data than an income approach. INCOME-APPROACH METHODS include capitalization of cash flows (CCF) and discounted cash flow (DCF). CPA/ABVs must identify a normalized net cash flow

Smart Stops on the Web

BUSINESS EVALUATION SITES Springboard for Searches In addition to listing the most popular user searches and an option to download a free version of its toolbar, this search engine and business directory provides news stories by industry–financial services, human resources and small business, for example. Visitors also can find

"Would You, Could You, Should You Blog?"

EXECUTIVE SUMMARY BLOGS (SHORT FOR WEB LOGS) are an information-sharing tool with many business possibilities. They offer commentary on a variety of topics with links to Web sites or other online resources. Low operating costs make blogging a great marketing and knowledge management option for small firms. A BLOG TYPICALLY

Price Equals Value Plus Terms

EXECUTIVE SUMMARY BUSINESS VALUATION (BV), SUCCESSION PLANNING and buy-sell agreements help CPAs prepare a foundation for selling a practice, but the final price of a firm will be affected dramatically by the transaction terms. TO SET A FINAL PRICE, CPAs SHOULD review the interrelationship of five key variables: the down

20 Steps for Pricing a Patent

nventors help solve vexing problems, both sophisticated and simple, and as a result sometimes enjoy considerable celebrity and rewards. Our society’s economic success, too, is based on innovation. To encourage public disclosure of inventions, the U.S. Patent and Trademark Office (USPTO) issues an inventor a patent, which excludes others from

Smart Stops on the Web

THE INTERNET BUSINESS VALUATION SITES Add a New Credential Institute members looking for a new challenge can register at this section of the AICPA Web site to take the November 15 or 30 Accredited in Business Valuation (ABV) exam. Other resources include the BV Competence Assessment Tool, Exam Candidate’s

Damages Aren’t Always Patently Obvious.

EXECUTIVE SUMMARY IN PATENT DISPUTES, CPA LITIGATION CONSULTANTS help patent holders demonstrate that “but for” an infringement they could have sold more of their product. Quantifying damages in patent infringement cases can be the focus of a forensic and litigation services practice. THE PANDUIT CASE PROVIDED FOUR QUESTIONS CPA litigation

Small Firms: Think Big!

EXECUTIVE SUMMARY THE SARBANES-OXLEY ACT HAS CREATED new requirements for public companies, spurring greater demand for professional services and for a range of engagements that offer opportunities to well-positioned smaller firms. ONE RESULT IS A CHAIN REACTION in which the big firms are going to focus on certain services and

The ABV Credential: Leading the Way

redentialing has always been an essential way for professionals to distinguish themselves and highlight their qualifications in a particular field. This article focuses on the Accredited in Business Valuation (ABV) credential, administered by the AICPA, and describes its charter, its underpinnings and its evolution as the accounting profession goes through

Smart Stops on the Web

SMART STOPS ON THE WEB Resources Revisited First listed as a Smart Stop a year ago this issue, this Web site still offers CPAs and business valuation (BV) professionals all the features they have come to expect, such as its BVLibrary, definition of the week, online forums, and gratis

A Good Deal Depends on Preparation

EXECUTIVE SUMMARY A SPECIALIST SUCH AS A CPA/ABV can optimize results for owners who want to sell to an outsider for the maximum the market will reasonably bear. HOW THE CLENT WILL USE A BUSINESS VALUATION (BV) determines the procedures a CPA/ABV will follow to produce the end result. At

Start a BV Engagement the Right Way

EXECUTIVE SUMMARY EACH VALUATION ASSIGNMENT IS UNIQUE, and often there’s more than one way to answer a question, interpret a fact or approach a problem. How the valuator prepares the client for the BV engagement sets its direction and becomes the foundation of the engagement letter and, ultimately, a responsible

The Auditor’s Approach to Fair Value

EXECUTIVE SUMMARY STATEMENT ON AUDITING STANDARDS (SAS) NO. 101, Auditing Fair Value Measurements and Disclosures, gives auditors guidance on understanding how an entity’s management calculates fair value and on determining whether that measurement conforms with GAAP. THE SAS’s PROVISIONS ARE EFFECTIVE FOR AUDITS of financial statements for periods beginning on

Businesses in Transition

EXECUTIVE SUMMARY CPAs CAN HELP BUSINESS OWNERS who are ready to move on but find they have no one to pass the baton to. As trusted advisers with intimate knowledge of clients’ operations, CPAs can advise them on choosing between the options of selling or liquidating. A BUSINESS USUALLY WILL

Difference Between Mergers and Acquisitions

EXECUTIVE SUMMARY CLIENTS BENEFIT FROM USING AN INTERMEDIARY such as a CPA/valuator to handle a merger or acquisition. A valuator should know a client’s industry thoroughly and have procedural training. Even experienced CPA/valuators may need to bring in an outside expert for longtime clients in order to avoid bias. CPA/VALUATORS

Smart Stops on the Web

BUSINESS VALUATION SITES Definitions, Discussions and Downloads CPAs involved in business valuation (BV) can obtain free information and purchase books and software here. The forums online section features various discussion topics such as what happened at recent BV-related conferences and court case decisions. The definition of the week clarifies

Where to find July’s flipbook issue

The Journal of Accountancy is now completely digital. 





Better decision-making with data analytics

Data analytics has become a hot topic, but many organizations have not yet managed to understand its potential, let alone put it to work. This report will take a deep-dive on how to best introduce or enhance the use of data in decision-making.