Michael B. Lehner, CPA/ABV, CFE, ASA
April 23, 2018
new tax law divorce settlements Business Valuation Alimony

How the new tax law affects divorce settlements & Business Valuation

Business valuation experts often help formulate settlement offers in divorce cases. This article highlights provisions of the Tax Cuts and Jobs Act (TCJA) that could affect divorce settlements, including elimination of the deduction for alimony payments, restricted deductions for state and local taxes, expanded uses of Section 529 education plans and reductions in business tax rates. A sidebar defines alimony under the tax rules that will apply through 2018.
April 1, 2018
Discounted cash flow vs. capitalization of earnings business value

Discounted cash flow vs. capitalization of earnings

Future earnings drive business value under the income approach. This article compares and contrasts two methods that fall under this approach: the discounted cash flow and capitalization of earnings methods. A sidebar explains what terminal value is — and how to calculate it.
March 18, 2018
price paid transaction “fair value”?

Deal price doesn’t always represent fair value

In appraisal rights claims, the price paid in a merger may not represent “fair value,” especially when the deal involves related parties. This article summarizes a recent Delaware Chancery Court case, where the judge concluded that a deal price is only as reliable as the process that was used to negotiate the transaction. In the absence of a “competitive and fair auction,” the court will rely on other business valuation methods instead. John Douglas Dunmire v. Farmers & Merchants Bancorp of Western Pennsylvania, Inc., 2016 Del. Ch., C.A. No. 10589-CB, Nov. 10, 2016
March 3, 2018
business valuations expected cash flow

Relying on management’s estimates of expected cash flow

Often, business valuations are based on estimates of expected cash flow, but it’s important to evaluate whether these estimates seem reasonable. This article explains the role that cash flow estimates play in valuing a business and the difference between forecasts and projections.
February 22, 2018
joint business valuation experts

Should you consider hiring a joint business valuation expert?

The use of a joint business valuation expert can often save resources — if the parties will openly share information and trust each other. This article outlines the benefits of using a joint expert. But it acknowledges that joint experts might not be realistic in all situations, including contentious divorces and shareholder disputes.
February 4, 2018
Cost approach M&A Business Valuation

Consider the cost approach in M&A

Under the cost approach, a company’s value equals the difference between its combined assets and liabilities. It requires a substantial amount of work to convert a cost-basis balance sheet to the required standard of value. This article explains how buyers and sellers are increasingly using this approach in mergers and acquisitions (M&As) to help compartmentalize the components of value, facilitate discussions about how to structure a deal and prepare for postsale purchase price allocations. This article also covers the basics, including the pros and cons, of this valuation approach.
January 24, 2018
Business Valuation buyout

Court increases dissenters’ buyout offer by more than 25%

When computer maker Dell decided to delist in 2013, the deal led to a showdown between management and dissenting shareholders who argued that management’s buyout price was unfair. This article explains why the Delaware Chancery Court decided to base fair value on a discounted cash flow analysis rather than the company’s stock price — and how taxes can have a major impact on value. In Re: Appraisal of Dell Inc., Delaware Ch., C.A. No. 9322-VCL, May 31, 2016
January 14, 2018
Family-owned business valuation

Family businesses bring valuation challenges

From the Rockefellers to the Kardashians, working together can bring out the best — and worst — in families. This article discusses four key questions valuation experts ask when valuing family businesses. They relate to family members on the payroll and other related-party transactions, management styles and key person discounts.
January 7, 2018
Buy-sell agreements

Buy-sell agreements: How to cover all the (valuation) bases

Every business with more than one owner needs a buy-sell agreement to handle voluntary and involuntary ownership transfers. This article explains why it’s important to update the agreement regularly and address all of the valuation issues that may arise.
October 16, 2017
gift and estate tax valuations

Recent developments that affect gift and estate tax valuations

Download Printable PDF In August 2016, the IRS proposed changes to the tax code intended to curb abusive estate planning practices involving family limited partnerships (FLPs) […]