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Valuation Observations

Valuation Observations is GBQ Consulting's business valuation newsletter.

Do the Math: ESOPs Can Dramatically Increase Sellers’ Proceeds

December 07, 2012
The advantages of employee stock ownership plans (“ESOPs”) are welldocumented, particularly from the viewpoints of employee-owner participants and the sponsoring company.

Seven “Hidden” Factors that Affect Company Values

July 06, 2012
Valuation experts consider a countless number of factors when valuing a company. The factors discussed in this article, while they may be overlooked by some, will be given proper attention by a quality valuator.

Buy-Sell Agreements: Is Your Purchase Price a Looming Nightmare?

February 03, 2012
Why a process-based approach is often the most equitable, least ambiguous method for setting the purchase price in a buy-sell arrangement.

Normalization Adjustments and Their Effect on Business Valuation

September 16, 2011
The proper (or improper) normalization of financial statements can have a significant impact on a company’s value.

New Goodwill Impairment Rules: Good on Paper, Not So Good in Practice?

June 03, 2011
FASB’s proposed changes to goodwill impairment testing under ASC 350 are aimed at reducing complexity and cost faced by financial statement preparers.

Fair Value Checklist for Audit Season

January 14, 2011
As auditors, investors, and other financial statement users increasingly scrutinize fair value measurements, this article provides a checklist of key financial reporting requirements related to fair value measurements during an audit.

Dispelling the Myths about ESOPs

November 12, 2010
ESOP myths are often accepted by owners and prevent many acceptable companies from becoming employee-owned. This article will identify and rebut what we believe are the most common myths about ESOPs.

A Valuable Estate Planning Tool Lost? Congress Threatens to Change GRAT Regulations

July 28, 2010
Proposed legislation threatens to reduce the estate planning-related benefits of GRATs.

SEC Offers Guidance on Goodwill Impairment Testing

May 03, 2010
Is your impairment test being performed correctly? Why historical methods for testing impairment of goodwill may be inaccurate in today’s economy.

Business Valuation: Where One Appraisal Does Not Fit All

February 16, 2010
A valuation report should be used for its intended purpose only, and ignoring this recommendation can lead to unfortunate consequences.

House Resolution 436 Makes Its Way to Ways and Means

August 06, 2009
If Enacted, Estate Tax Relief Act of 2009 Unlikely to be a Relief to Many

Like-Kind Exchange Rules Now Apply to Intangible Assets

May 28, 2009
The like-kind exchange rules within section 1031 of the Internal Revenue Code (“§1031”) permit taxpayers to defer gain recognition for certain business assets when they are replaced with similar, or “like-kind” property.

Private Equity Firms Face Increasing Pressure for Independent Valuation Assistance

April 23, 2009
As the U.S. private equity industry has expanded over the years, the focus of participants and regulators on the appropriateness of reported fund values has become increasingly acute.

DOL Cracking Down on Private Equity Fair Value Estimates

April 23, 2009
As market liquidity has declined, the percentage of pension plan assets invested in instruments with no generally recognized market has increased.

The Seven Deadly Sins of ESOP Valuations

March 25, 2009
Companies that sponsor employee stock ownership plans (“ESOPs”) are required by ERISA to obtain an independent valuation of the stock held by the ESOP at least annually for purposes of administering the plan.

SFAS No. 141(R): The Next Frontier in Business Combinations

March 25, 2009
Effective for deals closing December 15, 2008 and later, SFAS No. 141(R) brings about several changes to the original statement, many of which have a material impact on the recognition and valuation of the assets acquired by a company.

SEC Recommends Keeping Mark-to-Market Accounting

March 05, 2009
Fair value and mark-to-market accounting has been in place for years and abruptly removing it would erode investor confidence in financial statements.

A GR(E)AT Time For a GRAT

February 24, 2009
As the “Baby Boomers” reach retirement age, there are millions of individuals in the United States concerned with succession planning. One of the most effective vehicles for wealth transfer is the GRAT.

Goodwill Hunting: Improper Purchase Price Allocations Lead to Large Write-Downs

February 24, 2009
Many companies have improperly accounted for business acquisitions by recording the difference between the purchase price and the fair values of tangible assets simply as “goodwill”.

Economic and Financial Market Crisis: How does it affect the value of your private business?

February 03, 2009
Bailouts… bankruptcies… credit crises… investor panic… Newspapers have been flooded with poor financial news since the term “subprime mortgage” entered our every-day lexicon.

Good Bye, Goodwill: 2009 Promises to be Full of Impairment Charges

January 27, 2009
Several studies estimate that less than 10% of goodwill-carrying companies record goodwill impairment charges during a given year. We expect this percentage to more than double in 2009.
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