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Do you know what your business is worth? Our business valuation experts provide you with an objective, expert view of your company – while helping you understand the value drivers of your business. In addition to preparation for sale, knowing the actual value of your business is crucial for a number of reasons:
Your business' balance sheets and financial statements are not enough to present the true value of your company. An accurate valuation requires a customized approach. Our Certified Valuation Analysts integrate basic valuation principles with the very latest developments in business valuation theory to arrive at the most comprehensive valuation possible. We can also help you comply with the complex requirements of the Statements of Financial Accounting Standards (SFAS) Nos. 141 and 142. These standards require companies to perform a valuation to determine the current fair value of intangible assets and goodwill acquired in a business combination or merger and to periodically test previously recorded goodwill and intangibles with indefinite lives for impairment. For more information about our Business Valuation practice, email BVLS@SCandH.com or call (410) 403-1500 | (800) 832-3008.
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Valuations Insights, First Quarter, 2009 Divorce Court Analyzes Built-In Capital Gains in Net Asset Valuation Fickle v. Fickle, 2008 WL 3843846 (Tenn. Ct. App.) August 19, 2008 In the estate and gift tax arena, last year’s decision in Jelke v. Commissioner (11th Cir.) established a 100% discount for built-in capital gains when appraising holding company assets at fair market value. Without citing Jelke or related precedent, the Tennessee Court of Appeals considered the same issue in the context of divorce—in particular, whether it should account for built-in capital gains and other tax considerations when valuing a closely held real estate holding company. Husband’s expert urges tax affecting and discounts. The husband in this case was the sole proprietor of a company that owned several parcels of farmland. The company was the husband’s separate property and the land was its only asset. Before trial, the couple stipulated that the land had appreciated by $254,000 during the marriage, based on recent real estate appraisals, from $186,000 to approximately $440,000. To value the appreciation of his holding company interest, the husband presented an expert who testified that, notwithstanding the stipulated increase in land value, the company stock was worth $139,380 prior to the marriage and $286,387 at trial. He explained that “several factors connecting with valuing corporate stock” influenced his conclusions:
The husband testified (and his expert conceded) that he had no plans to liquidate the asset or sell the underlying properties. Rather than adopt the expert’s valuation, the trial court concluded that the value of the holding company was “really the value of the farm land.” Accordingly, it adopted the parties’ stipulation regarding the appreciated land values, finding that the marital interest in the holding company was worth the same amount: $254,000. However, “in this case, the trial court was clearly not persuaded by [the] husband’s expert to adopt the lower stock value,” the appellate court said. The evidence clearly supported the trial court’s determination of value, especially in this case, in which the holding company’s sole asset was real property, and the husband was the sole owner of stock. |
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