Stewart and Abraham to offer advice at BV conference
The three-day 2014 Chartered Accountants Australia and New Zealand Business Valuation and Forensic Accounting Conference starts 27 October in Sydney. BVR recently interviewed Richard Stewart and Mel Abraham, both of whom will take centre stage at the event, for a preview.
Stewart, a partner at PricewaterhouseCoopers (PwC), has a long history with the Chartered Accountants Australia and New Zealand and is intimately involved with the planning for the conference. He is particularly enthusiastic about this year’s event because it is the first since the business valuation specialisation was launched in Australia.
“The organising committee for this event developed the agenda specifically to present relevant and practical information for the current business valuation environment,” Stewart says. “We carefully crafted the sessions to appeal to different types of business valuation practitioners across various spectrums."
Stewart says keynote speaker Mel Abraham’s session on Day 1, “How to Build a Valuation Practice Without Having It Suck the Life Out of You,” is not to be missed. “Mr. Abraham has developed a successful reputation with his opinions about how the industry will develop over time and how individual businesses within the industry will develop. His session will help conference attendees look toward the future.”
A long-time business valuation leader who has been involved in the profession since 1985, Abraham says his session comes from very personal experience developed while watching many business valuation colleagues build successful practices at the cost of their lifestyle, health, relationships, and families. “I found myself starting to go down that path too,” he says, “but I was fortunate enough to realise the mistakes I was making. I had the opportunity to look at another way of building a practice without allowing it to destroy my life, my health, and my relationships.” Abraham recalls a time where he had nothing and was juggling full-time work with being a single father to a six-year-old—making his rise in the international business valuation industry all the more significant. “I had no cash flow. I had no clients. I had no presence in the industry. Most attorneys refused to hire me because I had no testimony experience. I had to find a way to build my presence in the industry to allow me to become a thought leader,” he says.
Abraham observes that most business valuation experts are subject matter experts but not thought leaders. There is a distinction: They are technically trained and can draw up beautiful spreadsheets and reports, but none of it matters if no one knows who you are or where to find you.
Abraham will offer tips for practitioners to build their practices and their position in the BV space with a layered approach to building a practice using technology as a tool and using marketing strategies that "get people to know who you are, what you do, and why you’re the unique person to solve their problems.”
Click here for more information about the 2014 Chartered Accountants Australia and New Zealand Business Valuation and Forensic Accounting Conference. The full interview with Stewart and Abraham is available in the October issue of Business Valuation Australia (subscription required).
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Is now the time for global BV standards?
Is it time for the BV profession to pull together and establish global BV standards? Can it be done? What are the obstacles? The global standards conundrum is just one of the issues that will be discussed during the “Lively Debate on Global Business Valuation Education” on 23 October in Toronto, Canada. A panel of global BV educators will debate the issues and challenges in the design of a global BV designation and accreditation system. The session will take place immediately following the annual general meeting of the International Valuation Standards Council (IVSC).
Panel members include April Mackenzie, CEO of the IVSC; Ben Elder, global director of RICS Valuation and EQS; Bob Morrison, chair of ASA Business Valuation Committee and chair of IIBV Education Committee; and Doug McPhee, global head of KPMG BV education.
Hosted by the International Institute of Business Valuators (IIBV) and Business Valuation Resources (BVR), this event is free. If you can’t make it in person, the debate will be webcast live and a recording will be available after the event. For details, click here.
In the meantime, join the discussion of this topic on BVR’s LinkedIn page.
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November/December business valuation courses in Melbourne
Plan now to attend local courses from the International Institute of Business Valuators (IIBV) that count towards the American Society of Appraisers’ (ASA) business valuation certificate and the intangible asset appraisal specialty.
Training programs previously available only in locations such as South Korea, Brazil, and Serbia are now available in Australia, with the first sessions held earlier this year. Coming up from the IIBV and the ASA are IIBV103 BV Case Studies (26-29 November) and ASA204 Advanced Topics (1-4 December)—both to take place in Melbourne.
ASA Australia chapter president David Crick says the decision to offer training in Australia was in response to business valuation practitioners who want to get involved in the ASA, which in Australia had up until recently been dominated by machinery and equipment valuers. His colleague, Bob Morrison, BV trainer and chair of both the ASA Business Valuation Committee and IIBV Education Committee, explains: “A theme of the feedback from the IIBV course in Melbourne earlier this year was that many valuers—even those who have been doing business valuation for ages—felt surprised to learn some of the complexities they hadn’t been exposed to previously.” Morrison says it became clear that there was a need for intangibles training—particularly for fair value accounting work required by AASB 3 Business Combinations.
If the Melbourne courses prove popular, Crick says IIBV will look to hold them in Sydney and other capital cities in 2015. For now, business valuers from across Australasia will need to travel to Melbourne for the training.
International focus: The diverse membership of IIBV’s education committee has driven its focus on global offerings. Morrison says the demand for business valuation training is increasing—and not just from those who want to get a BV accreditation. “As financial reporting and valuation standards continue to converge internationally, we’re seeing more interest from corporate and investment firms who want to know the technical side of valuation,” Morrison says.
For more information on the upcoming IIBV/ASA business valuation training courses in November and December, click here.
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Damodaran says quality growth is a
An especially resonant segment of the 10 September New York City workshop conducted by Dr. Aswath Damodaran (New York University Stern School of Business) dealt with the issue of “quality growth” and how analysts conclude that a company is, indeed, a true gem.
A rarity: In the valuation realm, “quality growth is a rare exception,” Damodaran explained. He went on to define “quality growth” as a company’s success in reinvestment in itself as opposed to gains from short-term efficiencies or acquisitions. He shared his view that the “narrative and the numbers” join together to tell the story behind any valuation because, he explained, scaling up is hard to do. Any “story” that culminates with truly high returns on capital is a riveting tale achieving elusive—and very rare—quality growth.
For an archived version of the webcast of the three-hour live session, “Price and Value: Discerning the Difference, an Advanced Workshop,” click here.
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New tool for estimating cost of capital
BVR introduced readers to the implied private company pricing line late last year as a new tool for estimating the cost of capital for small private companies. This tool was developed by Robert Dohmeyer (Dohmeyer Valuation Corp.), Peter Butler (Valtrend), and Rod Burkert (Burkert Valuation Advisors).
Feedback from the BV community has been positive, but some commenters have posed the question that, while IPCPL is fine for average companies, what if the subject company is not average—and what if it’s not in the same industry? How do you adjust for these factors? The IPCPL developers subsequently introduced the implied private company pricing model (IPCPM), which allows users to move off the IPCPL (line-size adjusted average). The model is the only specific private company cost of capital model that is indexed directly to the IPCPL cost of capital. It facilitates adjustments from the IPCPL size-based indication for comparable differences in: (1) systematic risk (i.e., beta); (2) diversifiable and total risk (i.e., total beta); (3) liquidity; and (4) debt capacity.
Learn more: The developers presented a webinar, Utilizing the Implied Private Company Pricing Model: The Cost of Capital Wizard, to explain how this exciting new model works in estimating cost of capital for companies whose revenues are less than $150 million. Listen to the webinar here.
Feedback requested: Visit the IPCPL/IPCPM webpage here now and give us your feedback via email at firstname.lastname@example.org.
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