Michael B. Lehner, CPA/ABV, CFE, ASA
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.
May 20, 2015
business valuation

An additional opinion can help resolve business valuation disputes

Even two unbiased, equally qualified valuation professionals applying sound appraisal practices are unlikely to arrive at exactly the same number. In fact, valuation differences of 10% or more are common — even under ideal circumstances. In litigation, when neither valuator will concede an objective third expert can help settle the dispute. This article discusses third expert selection and uses a hypothetical case to illustrate the important role a third expert can play.
May 20, 2015
business valuation experts accounting

Why business valuation experts need accounting know-how

Accounting and appraisal are interrelated disciplines. After all, financial statements are the foundation for valuing a business. So it’s imperative that business valuation experts understand accounting terminology and how to adjust for material differences in accounting methods.
May 20, 2015
business valuation

In business valuation, “normal” matters

Typically, the starting point for measuring a company’s earning power is its financial statements and other documents that reflect historic financial performance. But often, these documents contain entries that can distort a company’s true earning potential. For this reason, valuation experts often adjust a company’s financial statements to provide a picture of its financial performance under “normal” conditions. This article looks at three common areas of adjustment and explains the circumstances under which a normalization adjustment is appropriate.
May 18, 2015
valuation date

Why the valuation date is so critical

Business valuation experts are prepared for a number of reasons: estate planning, divorce settlements and shareholder litigation, just to name a few. And while the parties in these various matters may focus solely on the valuation amount, a valuation expert will also be focusing on the valuation date. This article explains why, under certain circumstances, an executor may elect to use an “alternate valuation date” rather than one that’s customarily used.
April 16, 2015
Divorce taxes

Factoring taxes into divorce settlements

How assets are split up in a divorce can have significant tax consequences, especially when the marital estate includes a private business interest. Valuation is just part of the picture. Equitable distributions require the parties to premeditate tax issues, too. This article lists common marital assets allocated in divorce settlement agreements. It also discusses how taxes affect asset value and explains how corporate redemptions are taxed. A sidebar looks at real estate and other investments that may create taxable gains when they’re sold.