Just-released IRS BV Standards available at BVR
Good news from the IRS: In last week’s BVR telephone conference, “Ask the IRS,” Mike Gregory, ASA, AVA, an Engineering Territory Manager with the Service’s large and midsize division, announced that just that day, the IRS had released its new Business Valuation Standards, which updates and incorporates comments from the BV professional community since the last (2004) version. For a copy, go to www. BVResouces.com.
We’re also offering a free copy of the article by fellow presenter Roger Wilde, CPA, ABV (Anacapa Valuations): "How to Avoid (or Survive) an IRS Valuation Audit." from the April 2006 Business Valuation Update™. To purchase a CD or Transcript of the 7/27 "Ask the IRS" Teleconference, click here.
Pratt’s Stats™ and BIZCOMPS® each near 10,000 transactions
The Pratt’s Stats™ and BIZCOMPS® databases continue to increase in size, and are now near 10,000 transactions apiece: That’s more companies than those listed on the NYSE, NASDAQ and AMEX combined. Each database contains detailed information on the sales of private companies—details that are difficult to obtain without a reliable network of data sources. Pratt’s Stats™ has a median revenue figure of $1.6 million, whereas BIZCOMPS® companies are smaller with a median revenue figure of $360,000. To get more from these two databases, go here.
Three big victories for business valuators
It’s not often that business appraisers get to claim total victory in the courts—but in the recent cases of Kohler v. IRS (U.S. Tax Court, July 25, 2006), Carraci v. IRS (U.S. Court of Appeals, July 11, 2006) and Gesoff v. IIC Industries, Inc. (Dela. Chancery Court, May 18, 2006), the experts—their attorneys and clients—must have gone home happy with the results.
In particular, the valuation reports by Kohler experts (Robert Schweihs, Roger Grabowski) and the Carraci appraiser (Allen Hahn) merited high praise and 100% endorsement from the respective courts. And in the Gesoff case, Neal Beaton’s analysis provided the general framework for the court’s consideration of a difficult, multi-national valuation; his work on specific and small company risks, however, points out the challenges that appraisers still face in the legal arena. Look for a review of all three cases in the next issue of the BVU; for a free abstract of the Gesoff opinion, click here.
An increase in new BV analysts?
One sign that the profession is growing is evident at the ASA Appraisal Conference, winding down today in Brooklyn, NY; enrollment for the intro ASA certification courses is unusually high. BV201N has 74 enrollees, while BV202N, on the income approach, has over 50. Many of the enrollees are currently employed by the Big 4.
Where are the AICPA BV Standards?
David Goodman, CPA, CVA, a BVU subscriber, just pointed out an error in a recent BVU headline that promised the “long-awaited, last draft BV Standards” from the AICPA (see the July, 2006 issue). “The exposure draft has not yet been released,” David writes—and he’s correct. Two AICPA sources admit that though the Institute had hoped to post the exposure draft by June 15th, it has been postponed in committee. (One source intimated that a hold-up comes from tax practitioners, who resist being subject to valuation standards.) Understandably, no one’s willing to guess as to when the draft might be re-released for exposure—for fear of creating confusion or false expectations, although the hope is by the end of summer, so that finalization can take place by or just-after year’s end.
Back by popular demand: Business Valuation Basics
One of the best ways to break into your local bar (association) or to connect with local law firms is to offer “BV 101” to its attorney members. A long-time appraiser and attendee at the recent AICPA/AMA’s National Conference on Divorce suggested making an hour-long presentation over a brown-bag lunch. And this coming weekend, Ron Seigneur, CPA/ABV, CVA (Seigneur Gustafson Knight, LLP, Denver) is presenting “BV for Dummies” at the Colorado Bar Association’s annual Family Law Institute in Breckenridge.
To save the time and cost of preparing your own materials, try the new Business Valuation Basics Seminar Package, a custom, all-in-one slide presentation that concisely explains the essentials of business valuation. Perfect for the next (or first) time you speak to lawyers, business owners, or the chamber of commerce, the 1 ½ hour BV Basics is customized with your firm's logo and branding, your time allotment, and other specifications. For more information, go to www.BVResources.com.
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