Demystifying Valuation, Economic Damages + Forensic Accounting

Are sellers of privately held companies leaving money on the table?

By way of background, when a buyer purchases an existing business, in most cases it is in the form of an asset purchase—or stated another way, the buyer sets up a vanilla shell legal entity and purchases all the assets of the selling business and then records the assets at fair value on the newly …

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Financial abuse of the elderly

The National Center on Elder Abuse has identified seven different types of elder abuse. These include physical abuse, emotional abuse, sexual abuse, financial/material exploitation, neglect, abandonment and self-neglect While I think we can all agree that physical, sexual, or emotional abuse of anyone, especially the elderly is horrific, any form of abuse can be devastating …

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Working Capital: What is it and how does it affect a transaction?

In simplest terms, working capital is the difference between current assets and current liabilities that are recorded on a company’s balance sheet. It provides an indication of the short-term solvency of the enterprise and includes assets such as cash, accounts receivable, inventory and prepaid assets also known as operating current assets. Alternatively, enterprises also record …

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Testifying experts must be careful of what they write

I have had the good fortune of having the opportunity to write articles for numerous local and national accounting and financial publications. In addition, I have authored many blogs which have appeared on my firm’s website. Every so often, I am requested to produce a copy of one of my articles to an opposing party’s …

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3 approaches for valuing business and homes

As a business valuation professional and CPA, I am often my family and friends’ first phone call regarding all sorts of financial questions and concerns. However, the most common question I come by is “How do you value a business?” The answer is far simpler than the application, but it is similar to how a …

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Gifting during COVID-19 pandemic

For business owners who have seen their business struggle and face unique pressures during the past five – six months, the thought of transitioning the business to the next generation may not have even crossed their minds. But if gifting a portion of the business to the next generation is potentially part of your estate …

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Tax case update: Estate of Streightoff v. Commissioner

In this estate case, the valuation provided with the estate tax return was based on an assignee interest claiming discounts for lack of control and lack of marketability. The decedent formed a limited partnership in 2008 with the purpose to manage and preserve the assets. The assets of the limited partnership consisted of marketable equity …

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Grieve v Commissioner gift tax case update

There have been two recent tax case rulings revolving around valuations of entities for either estate or gift tax filing purposes that those involved in estate tax planning should be aware of. Here is the finding for the first case. Grieve v Commissioner What appears at first to be a straight-forward valuation of two entities …

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Will it ever be the same again?

The beginning to 2020 has been interesting so far. We went from the highest reported DOW Jones average in February, to a 30 percent drop in market value a month later.  But what does that mean for values of privately held companies? Don’t miss: Business valuation during a pandemic To answer that question, we must …

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