The capitalization of earnings method is an approach acknowledged by the IRS that converts a single income data point to an indication of value. It can be applied to historical, current, or expected income, as represented by earnings, EBIT, EBITDA, … Continue reading →

I had two interesting engagements recently wherein I was asked to value variable executive equity compensation. One of the projects was for tax/fair market value purposes, and the other was for financial reporting, to determine the contingent liability associated with … Continue reading →

We all know private companies are generally more volatile than their publicly traded counterparts. That assumption almost always holds true, except in the case of some thinly traded public companies. So how can we reconcile using volatility calculations derived from … Continue reading →

A while back, we faced a hiccup in the audit review process on two of our valuation reports for a client. The valuation review team at [Big 4] took issue with our treatment of options on common stock. Specifically, [Big … Continue reading →

It seems lately that there has been quite a bit of attention being paid to tiered entities. This is an interest in an entity is held by another entity, and the interest in that entity is the one that is … Continue reading →

We’ve seen a couple of cases recently where a controlling interest in a target company was acquired along with some provision for future acquisition. The most recent example contemplated an option for the buyer to purchase the remaining non‐controlling interest, … Continue reading →

It seems like we’re getting more and more questions from valuation reviewers on issues relating to projections for assignments related to intangible assets and goodwill. To me, this makes complete sense, given the fact that almost all intangible assets (aside … Continue reading →

I’ve been told by some old timers that the valuation business is almost perfectly hedged. What I mean by that is there is always some niche within the profession that is experiencing growth while others may be contracting. During the … Continue reading →

Non‐operating assets confound me, because every time I think I’ve got some on the balance sheet, I find a way to talk myself out of classifying them as non‐operating. For example, a company building, which is owned by the subject … Continue reading →

This is a really interesting topic to me. It seems like folks are all over the place on this one. I just finished reading an article called, “Modeling Illiquidity Premiums for Alternative Investments” by Renalto Staub in the CFA Institute’s … Continue reading →