If attorneys could engineer the perfect forensic accountant, 78% of them would choose an accountant with strong analytical abilities. In a 2009 survey commissioned by the AICPA, after analytical skills, attorneys chose, in descending order, the abilities to be detail-oriented, ethical, responsive and insightful as the remaining top five essential
Valuation Services
Valuing Art for Tax Purposes
Even people who don’t collect art probably own a painting or sculpture or two. At some point, one of two things is likely to happen: One, the artwork will be given away, perhaps as a noncash charitable contribution for which the owner will claim an itemized deduction, or as a
Article Oversimplifies Becoming a BV Expert
I realize that it’s important to keep the pipeline full of younger CPAs who may develop an interest in the business valuation profession. Some of my colleagues have perceived a definite “aging” among BV’ers, with seemingly fewer younger members picking up the challenge. So I applaud the goal of attempting
Applying Forensic Skepticism to Lost Profits Valuations
Forensic accountants are frequently engaged to review insurance claims for business interruption or lost profits. Owners of privately held companies may inflate loss claims since they have control over the books and records. Business interruption (lost profits) insurance is intended to restore the claimants, not reward them with excess reimbursement.
How to Get Experience in M&A-Related Disputes
Editor’s note: This is a sidebar to “The CPA’s Role in Quantifying Post-Acquisition Dispute Damages,” March 2010. Most CPAs with an accounting and auditing background have advised a client who has acquired or sold a business or business interest. Disputes may arise related to the M&A transaction as outlined
The CPA’s Role in Quantifying Post-Acquisition Dispute Damages
Given today’s environment of bankruptcies, bank failures and recessionary pressure, consummating merger and acquisition transactions is more challenging than ever. The potential disputes arising from the challenges of an M&A transaction are numerous. The following two types of disputes are the focus of this article: working capital disputes regarding whether
Breaking Into Business Valuation
An aging population, increased regulation and the move toward fair value reporting have led to increased demand for valuation services in recent years. As baby boomers approach retirement and start thinking about succession and estate planning, the first step is often valuing the family business. Changes to the tax code
Detecting Circular Cash Flow
Following an initial customer confirmation request with no response, a first-year auditor mails a second and third request, all under the supervision of the auditor-in-charge assigned to the account. Field work begins on the audit, but there is still no response from the customer. Another auditor scanning the cash journal
Value Creation Measures a “Step in the Right Direction”
Your recent article “Four Options for Measuring Value Creation” (Aug. 09, page 34) touched on my long-held belief that accounting measures, while necessary and useful, are limited when it comes to valuing an investment in the company’s stock. Your proposed measures of value are an important step in the right
Securities Class Action Filings Decline
Federal securities class action activity declined in the first half of 2009, according to a report released Monday by the Stanford Law School’s Securities Class Action Clearinghouse and Cornerstone Research. Eighty-seven federal securities class actions were filed in the first half of 2009, a 22.3% decline from the 112 filings
Valuation Discounts for Estate and Gift Taxes
One purpose of fixing a value on an interest in a closely held business is to determine gift and estate tax liability. CPAs called upon to provide such valuations know that this can be a painstaking task. It is not an exact science but an educated estimate when, as often
Virtual Business Valuation Round Table: Definitions
Editor’s note: This is a Web-exclusive sidebar for “Valuations for Financial Reporting in Today’s Market,” May 09. The following definitions from the International Glossary of Business Valuation Terms or Glossary of Additional Terms may help readers who are not active business valuation analysts. Standard of Value—the identification of the type
Additional Comments From the Business Valuation Virtual Round Table
The JofA hosted a virtual round-table discussion with valuation professionals from the financial reporting sector to gauge how they are handling critical valuation issues in today’s climate and what their outlook is for the near future. Excerpts from that discussion were published in the JofA’s May 2009 issue (see “Valuations
Valuations for Financial Reporting in Today’s Market
The current economic environment has presented unprecedented circumstances for members of the business valuation profession. Those who perform valuations for financial reporting are grappling with issues surrounding impairment, market capitalization versus fair value determinations, reasonable rates of return, and active versus distressed and inactive markets, to name a few. The
FASB Updates Fair Value Guidance
Editor’s note: This is a sidebar to “Valuations for Financial Reporting in Today’s Market,” May 09. At its April 2 meeting, FASB voted to release three new pieces of guidance to address concerns over the application of fair value accounting standards in current market conditions. As a result, FASB
Concerns From an Auditor’s Standpoint
Editor’s note: This is a sidebar to “Valuations for Financial Reporting in Today’s Market,” May 09. Having never done a valuation, I have an alternative view from the valuation panel participants since I am from the audit and accounting side. I have been working with Dixon Hughes PLLC’s valuation
G-20 Committed to Global GAAP, Independence of Standard Setters
Meeting in London, the Group of 20 on Thursday reaffirmed its commitment to strengthening the financial system and again weighed in on accounting issues as it did last November in Washington. The primary communiqué released at the end of Thursday’s summit said the G-20 would “call on the accounting standard
IRS, Historic Hotel Face Off Over Facade
The Tax Court held that the Uniform Standards of Professional Appraisal Practice (USPAP) are not the sole measure of an expert witness’s reliability. The witness had been called upon to provide a value of a conservation easement restricting the use of real property, or “servitude.” Based on that testimony, the
Free Opt-In E-Newsletters Launched
The Institute launched two free, opt-in e-newsletters in January. Financial Planning Digest debuted Jan. 13. On Jan. 20, AICPA members were sent the inaugural issue of Forensic & Valuation Reporter. The newsletters include: Links to important stories, culled from hundreds of top news sources. Summaries of research, analysis, videos and
Social Insurance, Historical Cost Exposure Drafts Available for Comment
The Federal Accounting Standards Advisory Board (FASAB) is seeking comment on two exposure drafts, Social Insurance Accounting, Revised and Estimating the Historical Cost of General Property, Plant, and Equipment—Amending Statements of Federal Financial Accounting Standards 6 and 23. The Social Insurance proposal addresses challenges associated with incorporating estimates of future
Features
FROM THIS MONTH'S ISSUE
Flip out with the latest Tech Q&A
The September Technology Q&A column shows how to create dynamic to-do lists with Excel's checkboxes and also how to set up multifactor authentication texts that don't rely on phones. Flip through both items and view a video walkthrough in our digital format.