BV & FL—How to Do It: From Foundations to Advanced

Controlling Your Destiny through Independent Contracting—Key Considerations from the Perspective of a Primary Practitioner and an Independent Contractor

Tuesday, August 4
5:45 p.m.–6:35 p.m.
1 hour CPE
The use of independent contractors is one strategy businesses may consider in order to remain agile and respond to a rapidly changing business environment. Working as an independent contractor is a way to build your own practice and challenge your entrepreneurial spirit. Of course, independent contracting also presents its own unique set of challenges. Learn from the perspectives and experiences of an independent contractor and a primary practitioner.

After completing this session, attendees will be able to:

• Identify the opportunities and challenges of working with independent contractors, and best practices for doing so.
• Recognize the advantages and challenges of working as an independent contractor, and how to navigate this dynamic work environment.

Total CPE: 1 hour(s)
Field(s) of Study: Business Management and Organization—1 hour

Who Should Attend:

Anyone interested in gaining a better understanding of Independent Contracting

Program Level and Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective.

Advanced Preparation:

None

Sarah Spelts Loebl

Sarah  Spelts Loebl

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Shari Lutz

Shari  Lutz

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Lost Profits and the Modern New Business Rule—How it Works and How Defendants Try to Attack It

Thursday, August 6
11:35 a.m.–1:15 p.m.
2 hours CPE
Toward the end of the 20th century, states and federal courts began adopting what has been called the modern new business rule. Under this new rule, start up and newly established businesses may seek and receive lost profits. This session reviews the modern new business rule and how a higher standard of reasonable certainty has been applied under the rule. It will also discuss how the arguments being made by defense attorneys can eliminate or greatly reduce the estimated lost profits. This session will analyze the modern new business rule from both the perspective of both the plaintiff's expert and the defendant's.

After completing this session, attendees will be able to:

• Demonstrate an understanding of the modern new business rule and the higher standard of reasonable certainty set by the courts
• Calculate lost profits for a start up or newly established businesses by applying commonly used methodologies and data found acceptable by courts for this type of assignment
• Evaluate lost profit calculations made by an opposing expert
• Critique the work performed by another expert and provide alternative assessments based on tools previously used for attacking the modern new business rule
• Apply the information from this session in assignments relating to start up or new businesses whether the expert has been hired by the plaintiff or defendant

Total CPE: 2 hour(s)
Field(s) of Study: Economics—1 hour; Finance—1 hour

Who Should Attend:

CPA's who provide litigation support Attorneys Economists who provide litigation support Financial experts who provide litigation support

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

none

Allyn Needham

Allyn  Needham

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Litigation Case Study— Explaining and Presenting Your Cost of Capital Estimates

Thursday, August 6
11:35 a.m.–1:15 p.m.
2 hours CPE
Litigation Case Study- Explaining and presenting your Cost of Capital estimates: Presenting and explaining cost of capital data and resulting estimates in a litigation can be challenging. The session will be built around two case studies, one in a dispute engagement, and will present suggested report texts and documentation that should be provided in working papers to support conclusions. The session will demonstrate how the Cost of Capital Navigator can easily provide you with needed data, support documentation and working papers that will pass the rigor of the Courts.

After completing this session, attendees will be able to:

• Describe and support cost of capital estimates
• Identify and utilize support provided by Cost of Capital Navigator
• Revise and improve report text used to explain cost of capital concepts

Total CPE: 2 hour(s)
Field(s) of Study: Business Law—1 hour; Finance—1 hour

Who Should Attend:

Anyone who has been doing or expects to be doing litigation engagements

Program Level and Prerequisites:

Advanced: Learning activity level most useful for individuals with mastery of the particular topic. This level focuses on the development of in-depth knowledge, a variety of skills, or a broader range of applications.

Advanced Preparation:

Participants should already be familiar with typical forensic and litigation engagements.

Roger Grabowski

Roger  Grabowski

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Tax Calculations and Adjustments for BV—A Critical Skill for CPAs and Non-CPAs

Thursday, August 6
1:30 p.m.–2:20 p.m.
1 hour CPE
Consideration of taxes is a critical skill needed to value businesses and the recent tax law changes have made the calculations more complex. This session is designed for those who do valuations but do not have a tax background.

After completing this session, attendees will be able to:

• Recognize basics of business taxation
• Understand business tax return disclosures
• Create, explain, and defend tax adjustments to pre-tax business income and risk rates

Total CPE: 1 hour(s)
Field(s) of Study: Taxes—1 hour(s)

Who Should Attend:

Valuation experts who do not have a tax background and want to understand how business taxation works.

Program Level and Prerequisites:

Basic: Learning activity level most beneficial to individuals new to a skill or an attribute.

Advanced Preparation:

None

Chris Hamilton

Chris  Hamilton

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The Practical Use of Data Analytics in Your Forensics Practice

Thursday, August 6
1:30 p.m.–2:20 p.m.
1 hour CPE
The accounting and consulting industry is in a period of heavy investment in technology. Big Four firms are developing their own A.I. technology and data analytics tools. But if your firm does not have the budget of a Big Four firm, how practical is it to deploy AI or data analytics. In this session, we will explore the practical use of data analytics in a forensics practice.

After completing the session, attendees will be able to:

• Identify opportunities to use data analytics ("DA") in forensic and litigation engagements
• Assess the types of DA tools that can be deployed in most practices
• Identify reporting techniques of DA results

Total CPE: 1 hour(s)
Field(s) of Study: Finance—1 hour

Who Should Attend:

CPAs, CVAs, and other accounting and financial professionals who provide litigation or forensic services.

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

Participants should already be familiar with typical forensic and litigation engagements.

Rebekah Smith

Rebekah  Smith

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Advanced Issues Using the Single Period Capitalization of Cash Flow Model

Thursday, August 6
3:20 p.m.–5:00 p.m.
2 hours CPE
Single period capitalization models should not be taken lightly. Don't get caught taking costly short cuts. Income is not cash flow and key factors must be considered for proper application.

1) Is the business a good fit for a single period cap. model vs. multi-year DCF?
2) How to establish normalized revenue levels and profit margins.
3) Estimating "blended" growth based resulting from a super-normal growth phase.
4) Impact of abnormal working capital and capital expenditure levels.
5) Estimating WACC and Cap. Rate by considering normal debt financing level.

After completing this session, attendees will be able to:

• Identify when a business is a good fit for a single period cap. model vs. a multi-year DCF
• Estimate normalized revenue levels and profit margins
• Calculate an estimated "blended" growth rate based on a super-normal growth phase
• Apply adjustments for abnormal working capital and capital expenditure levels to ensure accurate measurement of sustainable cash flow
• Employ methods used to estimate a normal debt financing level in the WACC and adjust Cap. Rates to reflect the mid-year convention
• Recognize the benefits and weaknesses of the single period cap. model

Total CPE: 2 hour(s)
Field(s) of Study: Finance—2 hour(s)

Who Should Attend:

Practitioners and those responsible for critiquing or reviewing appraisal reports. Appraisers who are interested in improving their use of the single-period capitalization models.

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

A working knowledge of the Income Approach, particularly single period income or cash flow capitalization models.

Richard Goeldner

Richard  Goeldner

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Forensic Asymmetries

Thursday, August 6
3:20 p.m.–5:00 p.m.
2 hours CPE
Total CPE: 2 hour(s)
Field(s) of Study: Accounting—2 hour(s)

Who Should Attend:

Everyone that wants to have a successful business and freedom

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

None

Darrell D. Dorrell

Darrell D.  Dorrell

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COVID Relief for Businesses - SBA PPP Forgiveness and Main Street Lending Program

Thursday, August 6
5:15 p.m.–6:05 p.m.
1 hour CPE
In this session the presenter will discuss the ever-changing landscape of the Small Business Administration (SBA) Paycheck Protection Program (PPP) loans and the latest on the forgiveness process, navigating the forgiveness application and the safe harbors that practitioners should know and understand as well as documentation requirements. The presenter will also preview the Main Street Lending Program options, likely candidates for the loan and how a consultant, can assist with the application process.

After completing this session, attendees will be able to:

• Recognize the SBA PPP loan forgiveness application process
• Describe and articulate the safe harbors for forgiveness
• Identify required documentation and best practices
• Differentiate the Main Street Lending program options
• Utilize this knowledge to assist a company in assessing the appropriateness of a Main Street loan

Total CPE: 1 hour
Field(s) of Study: Accounting—1 hour

Who Should Attend:

CPAs, CVAs, CFOs and CEOs

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

Basic understanding of the SBA PPP Program

Rebekah Smith

Rebekah  Smith

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Testing, Validating, and Supporting Company Specific Risk—"Do We Have a Philosopher's Stone?"

Thursday, August 6
5:15 p.m.–6:05 p.m.
1 hour CPE
In this session we will dive into the subject of the elusive unsystematic risk found in businesses. This risk is often called Company Specific Risk by valuation analysts and is typically incorporated into valuation analysis by way of a premium added to the cost of capital – the Company Specific Risk Premium (CSRP).

There has been a flurry of interest in CSRP recently, so much so, that the Appraisal Foundation’s Board of Trustees has put together a Working Group through the Business Valuation Resource Panel to prepare a voluntary guidance white paper on the subject, as it lacks uniformity in practice. The Working Group’s primary focus will be CSRP applicable in Fair Value for reporting compliance purposes, and whether the valuation specialist should adjust the discount rate, the PFI, or both to account for CSRP.

Solving a problem without empirical data is a challenge, and for CSRP, there is no gold standard. During this fast-paced session, we will highlight ways to identify if such a risk exists in your subject company, and if there is such a risk, how you can quantify and validate the risk adjustment. We will focus on the risk rate and will include discussion of the income and market approaches.

After completing this session, attendees will be able to:

• Differentiate between systematic and unsystematic risk in their analysis
• Assess whether or not the business and financial risk of a subject company is properly accounted for in their cost of capital or in their cash flows models
• Quantify the impact to value that their CSRP has on their conclusion of value
• Reconcile the difference between methodologies applied.

Total CPE: 1 hour(s)
Field(s) of Study: Accounting—1 hour

Who Should Attend:

CPAs, valuators, practitioners, and those interested in developing and advancing their skills on technical cost of capital issues.

Program Level and Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective.

Advanced Preparation:

None

Lari Masten

Lari  Masten

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COVID-19 and the TCJA Impact on the Valuation of C Corps and Pass-Through Entities

Friday, August 7
11:35 a.m.–1:15 p.m.
2 hours CPE
Tax law affects the after-tax cash flows and investment rates of return of businesses and their respective owners. Consequently, changes in tax law affect business valuations, particularly when the changes are both temporary and permanent in nature and affect C corps and pass-through entities (“PTEs”) in similar and dissimilar ways. The Tax Cuts and Jobs Act (“TCJA”) contains all of these types of changes and has fundamentally altered the way businesses are valued in 2018 and beyond. This presentation will address the sunset period and post-sunset period provisions of the TCJA and their impact on the valuation of C corps and PTEs.

In addition to TCJA issues, I will address the valuation impact of COVID-19. Given the current social and economic disruption as well as the significant upheaval in the capital markets, the mechanical application of traditional valuation approaches may produce business values that lack credibility and reliability. Accordingly, it is important for analysts to think “outside-the-box” when conducting current business valuations. In this presentation, I will address the impact of COVID-19 and offer alternate valuation methods that should be considered in these turbulent times.

After completing this session, attendees will be able to:

• Describe the valuation related elements of the TCJA including changes to various aspects of corporate and individual taxation.
• Calculate the valuation impact of various elements of the TCJA including the corporate tax rate, qualified business income (“QBI”) deduction, ordinary income tax rate, state and local tax deduction, and the sunset period.
• Describe the impact of COVID-19 on the capital markets, cost of equity capital, market multiples, and projected financial performance.
• Develop alternate valuation methods that address the impact of COVID-19 in the current environment.

Total CPE: 2 hour(s)
Field(s) of Study: Finance—1 hour; Taxes—1 hour

Who Should Attend:

Valuation experts, CPAs and tax practitioners.

Program Level and Prerequisites:

Advanced: Learning activity level most useful for individuals with mastery of the particular topic. This level focuses on the development of in-depth knowledge, a variety of skills, or a broader range of applications.

Advanced Preparation:

An understanding of C corp and PTE valuation.

Daniel Van Vleet

Daniel  Van Vleet

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Divorce Taxation Including the Impact of the 2017 TCJA

Friday, August 7
11:35 a.m.–1:15 p.m.
2 hours CPE
An overview of divorce taxation covering the “old” law, repealed by the December “Tax Cuts and Jobs Act (TCJA)” (P.L. 115-97), and the new tax provisions. The “old Law” under IRC Sections 71 and 215 remain in force for pre-2019 Agreements, thus understanding the parallel tax systems in place is critical. This session will also review Sec. 1041, Property Transfers Pursuant to Divorces, QDROs, and a brief discussion of the impact of TCJA on business valuation.

After completing this session, attendees will be able to:

• Compose an outline of IRC Sections 71 and 215
• Describe how TCJA impacts divorce business valuations
• State the impact of TCJA on Antenuptials, Post-Divorce Actions, and general case settlement negotiations

Total CPE: 2 hour(s)
Field(s) of Study: Taxes—2 hours

Who Should Attend:

Anyone interested in divorce taxation

Program Level and Prerequisites:

Basic: Learning activity level most beneficial to individuals new to a skill or an attribute.

Advanced Preparation:

None

Jeffrey Urbach

Jeffrey  Urbach

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"Oh, say can you see"—Why Our View from the Weeds, Trees, and Forest can Influence Equity Value Assessment

Friday, August 7
1:30 p.m.–2:20 p.m.
1 hour CPE
A fundamental premise of valuation is to capture the behavior(s) of the notional pool of investors as of a given point of time and purpose. Does contemporary business valuation methodology and assumptions reasonably reflect these behaviors?

A simple example might be the conclusion of value is $10 million for a 20% equity interest. So, who is this notional investor? How many are there willing and able under modern portfolio theory (asset allocation) to consummate this transaction? Is this investor going to be active or passive? What is the "central tendency" of price multiples/rates under derived from the various transactions assumed under the Market and Income Approaches? What constitutes an outlier and when is its selection substantiated like Tesla vs. GM?

After completing this session, attendees will be able to:

• Perform a deeper due diligence and analytics to bolster assumptions that can be more rigorously qualified and quantified
• Assess if organization culture and strategy exists that allows management to tap into its internal and external relationships; thereby, differentiating itself from peers
• Differentiate from primarily financial capital driven valuation elements such as Free Cash Flow and Growth with more focus on price multiple factors like "human capital" such as risk management; how responsive to opportunities is management; what is the nature of key relationships; etc.?
• Analyze how much does the level, type, cost, and availability of debt capital used (or not) by Subject and comparative companies influence the selected price multiple and conversely how financially sophisticated is ownership and management in accessing equity funding
• Identify when and by how much written/oral agreements can have an influence on

Total CPE: 1 hour(s)
Field(s) of Study: Finance—1 hour

Who Should Attend:

Business owner + C-suite, business/entrepreneurship/finance academicians, trusted advisors, investors and judiciary.

Program Level and Prerequisites:

Advanced: Learning activity level most useful for individuals with mastery of the particular topic. This level focuses on the development of in-depth knowledge, a variety of skills, or a broader range of applications.

Advanced Preparation:

Should have read Cost of Capital; have completed five years of full-time valuation and/or 25 engagements of businesses with annual sales of 8+ figures.

Carl Sheeler

Carl  Sheeler

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Cautionary Tales of Valuation Adjustments and Potential Forensic Implications in Litigation

Friday, August 7
1:30 p.m.–2:20 p.m.
1 hour CPE
Valuations of a closely held business in the context of litigation such as in a contentious divorce, shareholder dispute, damages matter or other litigated corporate matter can be multifaceted and may require additional forensic investigative scrutiny. As such, it is important to consider the potential forensic implications of valuation adjustments as they may lead to other analyses. For example, in a divorce business appraisal, a valuation adjustment for discretionary (personal) expenses may, in turn, provide an implied “true income” and pay ability of a spouse. This is but one example - this session will address other examples you will likely face.

**This will be a replay of the recorded session from the June Conference. Presenter Karolina Calhoun will not be on live to answer questions but you can e-mail her directly at Calhounk@mercercapital.com and she will respond within 24 hours of receipt. You still need to answer all poll questions that are launched throughout the presentation to earn CPE.**

After completing this session, attendees will be able to:

• Evaluate financial statement adjustments and corresponding implications
• Interpret the need for forensic services as a result of valuation adjustments, such as tracing services, income determination, and other analyses

Total CPE: 1 hour(s)
Field(s) of Study: Accounting—1 hour

Who Should Attend:

CPAs, attorneys, business owners, and practitioners

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

None

Karolina Calhoun, CPA/ABV/CFF

Karolina  Calhoun, CPA/ABV/CFF

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Using Regression Analysis in the Market Approach (GCTM)

Friday, August 7
3:20 p.m.–5:00 p.m.
2 hours CPE
The attendees will learn how to use Excel's regression analysis and to apply it to Market Approach methodologies. Learn how regression analysis can filter a sample of comparables to statistically identify outliers that are skewing one's data significantly. Attendees will be shown how to use regression to statistically predict the proper revenue multiplier and cash flow multiplier for the subject, thus, eliminating the messy subjective selection process. Learn why every appraiser makes a critical error when he or she selects the upper or lower quartile or standard deviation of the multipliers to apply to his subject company.

After completing this session, attendees will be able to:

• Utilize statistical tools to eliminate the embarrassingly huge differences in values that typically occur when using current methodologies to calculate the revenue and cash flow multipliers
• Use the basic data from DealStats (formerly Pratt's Stats) or Bizcomps to statistically predict the appropriate multipliers for the subject company
• Explain how regression analysis will put one's GCTM Market Approach on a scientifically sound footing
• Describe the challenges to your selection process for multipliers will be eliminated and no more huge gaps between multiplier values.

Total CPE: 2 hour(s)
Field(s) of Study: Computer Software & Applications—1 hour; Production—1 hour

Who Should Attend:

Business appraisal practitioners

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

None

C Fred Hall

C Fred  Hall

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Audit Evidence Versus Forensic Evidence

Friday, August 7
3:20 p.m.–5:00 p.m.
2 hours CPE
In this session the presenter will discuss the following: 1) Comparisons of the Traditional Audit Model based on Management Assertions to the Forensic “Testimonial Model"; 2) Forensic Credentials—Fraud Related versus Litigation Support Related; 3) Similarities between an Audit Engagement versus a Forensic Engagement; and 4) Practice Tips for a successful forensic engagement and the management of forensic evidence

After completing this session, attendees will be able to:

• Utilize the tools and knowledge necessary to understand the nature, differences, and similarities of forensic evidence used during the litigation process and audit evidence normally gathered during a traditional audit engagement
• Evaluate court room etiquette and rules of evidence applicable to the testifying expert in support of an opinion proffered

Total CPE: 2 hour(s)
Field(s) of Study: Auditing—1 hour; Business Management & Organization—1 hour

Who Should Attend:

CPAs, and valuation analysts interested in performing forensic engagements

Program Level and Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Advanced Preparation:

None

Francisco Rosillo

Francisco  Rosillo

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Role of Financial Litigation Consultants in Class Certification

Friday, August 7
5:15 p.m.–6:05 p.m.
1 hour CPE
This session will explain what plaintiffs must demonstrate and what defendants must challenge at the class certification stage—and the role of the financial litigation services expert witness in those demonstrations—in order to prove or disprove membership in a proposed class. This session will discuss the role of the financial litigation consultant regarding the "ascertainable" and "administratively feasible" requirements. In summary, these concepts require an objective class definition and an “administratively feasible” way to determine who satisfies that definition.

After completing this session, attendees will be able to:

• List the requirements for class certification
• Identify recent court decisions impacting expert witnesses in the certification stage of class action litigation
• Indicate the unique steps in providing commercial litigation services for class actions
• Recognize how to fulfill the trial court’s obligation to undertake a “rigorous analysis” at the class certification stage
• Identify unique features in the expert report relating to class actions at the certification stage

Total CPE: 1 hour(s)
Field(s) of Study: Business Law—1 hour

Who Should Attend:

Expert witnesses, financial litigation consultants, MAFFs and attorneys

Program Level and Prerequisites:

Basic: Learning activity level most beneficial to individuals new to a skill or an attribute.

Advanced Preparation:

None

Michael Pakter

Michael  Pakter

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