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Quarter 3, 2008 |
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Contents
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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Welcome to Valuation Insights — a complimentary service presented quarterly to our friends in the legal and consulting professions. We hope that you will find the topics, articles, and court case abstracts relevant, timely and informative. SC&H Group is one of the fastest growing CPA and management consultant firms in the country. We have been named to the Inside Public Accounting Best of the Best list of America’s Top CPA firms for nine years, and were recently named one of the Top 100 Firms by Accounting Today. With office locations in Maryland, Virginia, and Georgia, SC&H has a national client base ranging from emerging businesses to Fortune 500 companies. The firm’s service offerings include business valuation, litigation support, comprehensive accounting, tax and business advisory services, and state and local tax services. Please contact us if you would like additional information on any of these topics or to discuss ways we may be of assistance to you in your client matters. Michael J. Young, CPA/ABV, CVA Nathan E. DiNatale, CPA/ABV, CVA, CFE Can You Take it With You? Court Revisits Family Limited Partnership Discounts
In the Matter of the Estate of Norman B. Hjersted, 2008 WL 269013 (Kansas) In deciding the first incarnation of the Hjersted case in 2006, the Kansas Court of Appeals held that discounts for lack of marketability and control did not apply to a family limited partnership (FLP), particularly when its purpose was to disinherit Mr. Hjersted's wife of nearly twenty years, to the benefit of of his son by a prior marriage. The son appealed to the Kansas Supreme Court. Click here for the full article
Court Questions Expert's Objectivity, Methodology in Reasonable Royalty Valuation
Bowling v. Hasbro, Inc., 2008 WL 717741 (U.S. Dist.) Most attorneys understand how important it is that financial experts maintain objectivity and support their conclusions with sound application of valuation standards and methodology. They also realize the weaknesses that might open up in the other side should an opposing expert fail to remain independent and/or analytically sound. This new Daubert decision from the U.S. District Court (Rhode Island) serves as fair warning for what happens when an the expert’s damages opinion lacks credibility on both counts. Click here for the full article
IRS Expert Attacks Key Assumptions in Inflated Appraisal KSP Investments, Inc. v. U.S., 2008 WL 182260 (U.S. Dist.) In December 1999, the plaintiff retained a "Big 4" accounting firm to determine the fair market value of an overseas waste-to-energy facility subject to a sale and leaseback arrangement. Several years later, the IRS adjusted the plaintiff's 1999-2003 tax returns, claiming that the plaintiff used the 1999 appraisal to inflate the purchase price of the facility to obtain greater depreciation and interest deductions for the transaction. Click here for the full article Finally, a Tax Court Considers a 'Good Facts' Family Limited Partnership Estate of Mirowski v. Comm’r, T.C. Memo. 2008-74 After a recent string of "bad facts" cases dealing with family limited partnerships (FLPs) and limited liability companies (LLCs), the U.S. Tax Court delivered some relief to taxpayers with this new case. Mirowski also provides a potential “roadmap” for good planning, funding, and presenting an FLP or similar entity, such as a limited liability company, should it meet an IRS challenge under IRC §2036(a). Click here for the full article Double-Dipping Rationale May Have Prompted Court To Prefer Asset Approach Wold v. Wold, 2008 N.D. 14 WL 183527
Click here for the full article Working with Appraisers to Solve Problems in Valuing The Very Small Business Valuing the very small company can often be more challenging than valuing a large firm or corporation. These types of valuations most commonly arise in the divorce cases, although they also are frequently present in shareholder litigation, partnership dissolutions, and similar litigation. Often, client budgetary restrictions are an overriding consideration. However, attorneys and appraisers can work together from the outset of an engagement to meet client budgets and provide credible valuation. Here are a few areas where communication and cooperation can be the most helpful. Click here for the full article
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