Demystifying Valuation, Economic Damages + Forensic Accounting

Small business fraud: not so small, twice as costly

This past April, the Association of Certified Fraud Examiners (ACFE) released the 10th edition of its global study on occupational fraud, the Report to the Nations – 2018 Global Study on Occupational Fraud and Abuse (the “ACFE Report”). The ACFE Report summarizes statistics based on 2,690 cases that resulted in over $7 billion in damages. …

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Merger and acquisition activity and tax reform

One of the three major changes included in the Tax Cuts and Jobs Act of 2017 (TCJA) that impacts multinational companies (MNC) is the ability to repatriate cash from overseas. The TCJA makes it easier for MNCs to get cash earned abroad back to the United States. A sudden increase in cash on an MNC …

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Why CPAs who testify like QuickBooks

CPAs who perform litigation support and forensic accounting services are retained as expert witnesses to provide reports and to testify on their reports on such matters as: Determining income of mother or father from an owned business for child support or spousal maintenance purposes, Determining lost profits of a business in owner disputes, Determining the …

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Tax reform and the impact on divorce

With the passage of the Tax Cuts and Jobs Act (TCJA) in December 2017, most people have heard about the changes in tax brackets, the elimination of exemptions, the reduced tax rate for corporations and the qualified business deduction for certain passthrough entities. For those in the midst of divorce, or contemplating a divorce, the …

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Tax reform and valuation, the big picture

We saw large increases in the value of public companies during 2017 in anticipation of the new administration’s proposals to reduce federal regulations, promote growth policies and push for tax reduction. The Dow Jones Industrial Average and the NASDAQ both increased just over 20% during 2017 and the S&P 500 index increased by almost 16% …

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Subsequent events in the world of business valuation

The valuation of a business is prepared as of a certain date in time. This could be any date, often determined by the purpose of the valuation. A valuation prepared for estate tax purposes is as of the date of death. A valuation for divorce purposes is often the date of service. The valuation date …

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What is an S Corporation worth? The IRS fight continues

When it comes to the valuation of non-controlling interests in pass-through entities (PTEs) such as a Subchapter S corporation, there have been ongoing disagreements between business valuators and the IRS. The issue is whether and to what extent to offset PTE earnings for income taxes (often termed “tax-affecting”). Doing so reduces the value under the …

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Disaster relief fraud, don’t fall victim

My heart, as many others, goes out to the people of Houston and the surrounding cities and towns affected by Hurricane Harvey. I experienced the storm surge created by Hurricane Isabel in 2003. My home was within inches of flooding and my next door neighbor completely lost his home simply because the typography of his …

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How to market your business for a potential sale

Recently, a number of clients have engaged us to value their business because they do not have a firm grasp of what their company is worth and they are considering selling their interest in the near future. After we performed the assignment and met with the client to discuss the value drivers of their business, …

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Who are the buyers for your business?

There is a reason it is called exit planning – there are steps required for you to ultimately leave the company you have built. One-step is to understand who will be on the other side of the negotiation table in a potential transaction. In most cases, there are five types of buyers in the market …

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