Michael B. Lehner, CPA/ABV, CFE, ASA
September 17, 2016
business valuation hidden assets unreported income

In search of unreported income

Getting a client a fair divorce settlement is challenging enough. But when the other spouse siphons off a business’s income, there’s double trouble. That’s why it’s critical to employ a forensic expert at the first sign of malfeasance. He or she can use several accounting methods to uncover missing income in divorce cases. This article explains some of these methods.
August 22, 2016
business valuation

Using a third business valuation expert to bridge the gap

When each side to a legal dispute hires its own business valuator, the two experts are unlikely to come up with exactly the same conclusion. It sometimes makes sense to hire another valuator to identify and reconcile key differences. This article provides guidance about hiring a third valuator, including how to keep costs down and define parameters up front.
June 27, 2016
business valuation

Think of business valuation first when writing buy-sell agreements

Buy-sell agreements protect business owners from unexpected events. They can also be important when owners disagree and want to sell their interests — or buy out a difficult partner. Too often valuation issues take the backseat to legal issues, leading to irreconcilable differences when the agreement comes into play. Whether owners are deciding on a current buyout price, purchasing insurance coverage for key shareholders or planning future buyout terms, an accurate valuation is imperative. This article provides a definition of value and looks at the three valuation methods used. It also notes the importance of updating the agreement over time.
June 18, 2016
5 steps to valuing a business

5 steps to valuing a business

Valuators use a variety of analytical techniques and possess different qualifications. But a common denominator is the process that everyone uses to value a business. This article describes the five steps a valuator undergoes: 1) agreeing on engagement parameters, 2) requesting documents, 3) undertaking fieldwork, 4) preparing the report, and 5) providing expert testimony.
June 10, 2016

Revenue Ruling 59-60:Tried-and-true guidance for valuing private business interests

Revenue Ruling 59-60 of the Internal Revenue Code has been around for nearly 60 years. The IRS originally created this landmark publication for gift and estate tax purposes. Today, it’s often referenced in valuations prepared for other reasons, including divorce cases and shareholder disputes. This article highlights its definition of fair market value and lists various factors to consider when valuing a closely held business interest. A sidebar discusses what this guidance says about the use of weights and averages in business valuation.
March 20, 2016
hidden assets business value

The shadowy world of hidden assets

Whether intentionally or not, the “lower value” side of divorce, shareholder or other conflicts may obscure or ignore certain assets to bolster its case. To establish a fully rounded value estimate, financial experts have to look harder. They must enter the shadowy world of hidden assets. This article explains the kinds of financial data experts look for and how they detect hidden assets.
March 20, 2016
business valuation selling price

Market a business to maximize its selling price

When it’s time to sell, how a private business is marketed can have a significant impact on the cash available for distribution to owners. This article discusses current M&A trends, methods for establishing a reasonable asking price and why it’s important to do one’s homework before seeking prospective buyers. A sidebar discusses the tempered market response to the new online equity crowdfunding rules that recently went into effect.
February 17, 2016
rebuttal business valuation reports.

Save time and money with rebuttal business valuation reports

A defense attorney will often wait until the plaintiff’s attorney submits a valuation report. Then, the defense hires its own expert to prepare a “rebuttal report,” rather than pay for a separate full-blown valuation report. This strategy can be a cost-effective way to poke holes in the opposing expert’s analyses, but rebuttals are only effective when they’re detailed and accurate. This article explains reasons clients opt for rebuttal reports, the preferred reporting format and the level of detail courts have come to expect from rebuttal experts.
February 10, 2016
Retirement exit strategy

Retire at your own risk: How to maximize value when exiting a private business

The oldest Baby Boomers will turn 70 this year. Although a lot of younger Boomers continue to be actively involved in the workforce, many older ones who started their own businesses are finally starting to retire. Removing a key person from daily business operations generally isn’t something that can be done overnight, however. It takes time to facilitate a seamless transition to new management that also maximizes cash flow to the retiree. This article identifies various exit strategies that owners might consider and the importance of having realistic expectations about market value. A sidebar reminds owners of all ages to draft a valid buy-sell agreement, because not all exits occur at retirement.
October 30, 2015
visual aids business valuation experts

Visual aids A picture can be worth 1,000 words

Business appraisers who serve as expert witnesses in court face two daunting tasks: They must capture the attention of a judge or jury and make complex financial analyses easy to understand. This article provides tips on how to use impactful visual aids to break up the monotony and drive home key points in an expert’s oral testimony and written reports.