Business Valuation (Tuesday)

Terminal Value: Fade Factors and Growth Assumptions

Tuesday, December 14, 2021 10:10 a.m. - 11:50 a.m. ET

Fading out growth is one option to arrive at realistic assumptions in a perpetual valuation environment. There are several options which variable is to be faded: growth rates, invested capital, (excess) rates of returns. The session discusses these options and shows their implications for terminal value calculations.

  • Identify which fade factors to implement in terminal value models and judge their implications

Total CPE: 2
Fields of Study: Accounting: 1, Finance: 1
Program Level: Advanced - Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Who Should Attend:

Professionals interested in scientific foundations in order to avoid technical flaws in their valuation reports.

Prerequisites:

Good knowledge of topic and experience in the field. Advanced level programs are often appropriate for seasoned professionals within organizations; however, they may also be beneficial for other professionals with specialized knowledge in a subject area.

Advanced Preparation:

None


Sufficient, Relevant, and Competent Evidence from Using Valuation Databases

Tuesday, December 14, 2021 12:10 p.m. - 1:00 p.m. ET

With all the different databases available, how do you vet yours? What hurdles or what "standard" do you use when judging a database and how it might be used in an engagement? Learn different ways to build credibility of using the data. Learn the pitfalls of using data inappropriately. While you are the expert and get to make the call at the end, data can make or break a report. We will discuss benchmarking data like RMA and IRS. We will discuss comparative transaction data like Bizcomps and ValuSource Market Comps. We will discuss public company data.

  • Describe the factors enhancing credibility
  • Recognize the standards (NACVA) for sufficient, relevant, and reliable data
  • Determine different ways to describe "data" in a report

Total CPE: 1
Fields of Study: Accounting: 1
Program Level: Intermediate - Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Who Should Attend:

Valuation analysts who use data to infer or deduce or support a calculated or concluded value.

Prerequisites:

Previous training or research on subject matter being taught. Such persons are often at a mid-level within the organization, with operational and/or supervisory responsibilities.

Advanced Preparation:

None

Dave Miles

Dave  Miles

CPA, CVA, CGMA

Read Biography

Empirical Research Regarding Discounts for Lack of Marketability

Tuesday, December 14, 2021 2:00 p.m. - 3:40 p.m. ET

The appropriate amount of discount for lack of marketability (DLOM) has long been critical for valuation professionals, investors in and issuers of illiquid securities, financial statement issuers and auditors, the courts, and others. The determination of an appropriate discount has been extensively discussed and debated. Yet, before Mr. Vianellos’s research, an empirical study using defined and objective data that could actually justify a methodology for a lack of marketability discount was lacking. This session is a summary of Mr. Vianello’s research into the market evidence of discounts for lack of marketability. The session will challenge broadly used methodologies for determining discounts for lack of marketability.

After completing this session, attendees will be able to:

  • Explain the time and price risks that underlie DLOM
  • Summarize some of the limitations of restricted stock benchmarking for DLOM
  • Recognize the empirical support for probability based DLOMs combined with option pricing theory
  • Organize superior guideline company groups
  • Utilize and strengthen your DLOM conclusions
  • Test the DLOMs of opposing experts
  • Revise and improve analysis of asset fair value

Total CPE: 1
Fields of Study: Auditing: 1
Program Level: Advanced - Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Who Should Attend:

Valuation practitioners, valuation expert witnesses, business brokers, mergers and acquisitions professionals, financial litigators, CFOs, financial statement auditors.

Prerequisites:

Good knowledge of topic and experience in the field. Advanced level programs are often appropriate for seasoned professionals within organizations; however, they may also be beneficial for other professionals with specialized knowledge in a subject area.

Advanced Preparation:

Attendees should have an understanding of the Longstaff, Black-Scholes, and Finnerty option models. An understanding of the restricted stock "studies." An understanding of the contents of the Pluris and Stout restricted stock databases. An understanding of probability and cumulative probability.