21
Date: Thursday, March 21, 2019
Time:
10:00am-11:40am PT / 1:00pm-2:40pm ET
Format: A BVR Webinar

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Featuring  (click image for bio)

Ericka Heiser
MBA, CVA
Ketel Thorstenson

About This Program

Valuing a minority interest in an entity with farm/ranch ownership and/or operations can be tricky. As analysts, we are bound to valuation theory, but economic reality must play a role as well. As valuation professionals know, an owner of a minority interest cannot force liquidation of assets, so that precludes us from strictly employing the asset approach. However, cash flows from farms and ranches are very low in relation to the underlying ground; as such, the value determined by employing the income approach is significantly lower than what a hypothetical buyer of such minority interest would likely pay. Therefore, we have a conundrum. The answer to such conundrum is the weighted approach! Join Ericka Heiser for this must-attend webinar to discover how this approach incorporates both valuation theory and economic reality.

Agenda

  • Define unique circumstances owning a minority interest of farm/ranch ownership
  • How the Partnership/Operating Agreement plays a role
  • Describe approaches used to value such interest
  • Discuss court cases to buttress the Weighted Approach
  • Outline how to incorporate the rate of return study of publicly-held real estate limited partnerships and REITS to calculate the appropriate capitalization rate
  • Discuss how to deal with discounts for lack of control and marketability
  • Determine what weighting is appropriate
  • Describe methods to test the reasonableness of the weighting and overall discount
  • Outline tips on report writing

Learning Objectives

  • Understand the unique circumstances of owning a minority interest in an entity that owns and operates a farm/ranch
  • Understand how components of entity’s partnership/operating agreement can affect how to weight the approaches, or if it is even appropriate
  • Discover how to weight valuation approaches to determine a value of a minority interest using both valuation theory and economic realities
  • Learn about applicable court cases and how they support such approach
  • Explore the rate of return study of publicly-held real estate limited partnerships and REITs to appropriately calculate the capitalization rate in farm/ranch valuations
  • Expand knowledge of discounts for lack of control and marketability as they pertain to farm/ranch entities
  • Understanding the Weighted Approach and the appropriate weighting

Single Connection Policy

Admission to this event authorizes one computer and phone connection for one location. These connections may be transferred users and/or locations. Multiple concurrent connections for a single admission registration are not allowed.

Multi-User CPE Policy

Admission to this program includes one CPE certificate for one individual. Any additional listeners requesting CPE must pay a processing fee assessed at the completion of the online CE survey for this course.

CPE Processing Fees may be bypassed by entering a valid, unused CPE Authorization Code (for single event purchasers) or by logging into BVR's website (for subscribers to BVR's Training Series).

CPE Information

Prerequisites: Knowledge of Business Valuation
Program Level: Advanced
Preparation Required: None
Delivery Method: Group Internet-Based
Recommended CPE: 2 Credit Hours (Accounting Technical)

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