Celebration of Life planned for Shannon Pratt

In the last issue, we shared the sad news that Shannon Pratt, a giant in the business valuation profession, had passed away. There will be a Celebration of Life on Jan. 6, 2022, at 1:00 p.m. at Valley Community Presbyterian Church, 8060 SW Brentwood St., Portland, OR 97225. The family has requested no flowers. Condolences can be sent to the family at: 6677 SW Bancroft Way, Portland, OR 97225-1902. The burial will be private.

The obituary can be found if you click here.

Incompetent valuation KOs jury verdict

The jury’s verdict in an eminent domain trial could not stand because the jury relied solely on the valuation the expert for the Pennsylvania Department of Transportation (PennDOT) did, “which was incompetent.” The expert limited the damages to the partial taking of the property and did not take into account the after-taking damages to the remaining property, a hotel. Further, the trial court erred in denying the condemnee’s motion for a new trial “because the after-taking valuation of the property offered by PennDOT’s expert was not competent or based on evidence in the record.” As a result, the judgment was reversed and remanded for a new trial.

The case is State Route 00700, Section 21H v. Bentleyville Garden Inn, Inc. (In re Condemnation by DOT), 2021 Pa. Commw. LEXIS 562; 2021 WL 4483462, and you can read a case analysis and the full opinion on the BVLaw platform.

What’s your BV beef? Join the BV Festivus tomorrow, December 9!

In the final episode of BVR’s Power Panel for 2021, a lineup of legendary experts will have a Festivus-themed conversation—with a BV twist. Jay Fishman (Financial Research Associates), Roger Grabowski (Duff & Phelps/Kroll), and Chris Mercer (Mercer Capital) will conduct a light-hearted “airing of grievances” and discuss practices and thought processes within valuation that need reexamining along with suggestions for how the profession can move forward. Have you got a beef? Send it in (videos welcome) to Jaredw@bvresources.com, and join us for a discussion that is sure to bring some holiday cheer to your practice! To register, click here. The webinar qualifies for two CPE credits.

Poll: Most business valuers are generalists

During a recent webinar, the audience was asked: Do you specialize within a particular industry? Three-quarters of respondents said that they are generalists and have little or no industry specialization. One in five (20%) said that they do specialize and mainly work in a few (from two to five) industries, and 6% said they mainly work in one industry. The webinar was a free walk-through of the Vertical IQ industry research platform, and 70 audience members responded to the poll.

Strong LEI performance continues, reports BVR’s EOU

In October 2021, the U.S. Leading Economic Index (LEI) rose 0.9%, to 118.3 points, reports the Economic Outlook Update (EOU), published by Business Valuation Resources (BVR). The report notes that, following the rise, the U.S. LEI broke its previous record high reached in September 2021. “The increased pace now suggests that the economy is projected to grow in 2022 and perhaps gain some momentum into the final months of the year,” the report says. The Conference Board now forecasts real GDP growth to reach 5.0% for the fourth quarter of 2021 and 2.6% for the first quarter of 2022. The 52-page Economic Outlook Update for October 2021 contains expansive research from leading authoritative resources, which you can use in your valuation reports as long as you give proper attribution. To learn more, visit bvresources.com/eou.

‘Author’s Notes’ highlight Trugman’s new book

BVWire has been getting a sneak peek at some of the revised chapters in the new, sixth edition of Understanding Business Valuation by Gary Trugman (Trugman Valuation). The book is known for its real-world examples and practical advice based on the author’s many years of experience. One way he does this is through the many “Author’s Notes” that are spread liberally throughout the book. For example, in the chapter on valuation standards, he includes most of the AICPA standard (SSVS 1) and adds his annotations, such as:

Jurisdictional Exception

.10 If any part of this statement differs from published governmental, judicial, or accounting authority, or such authority specifies valuation development procedures or valuation reporting procedures, then the valuation analyst should follow the applicable published authority or stated procedures with respect to that part applicable to the valuation in which the member is engaged. The other parts of this statement continue in full force and effect (Interpretation No. 1 [VS sec. 9100 par. .01-.89]).

AUTHOR’S NOTE: What does this really mean? If someone else makes the rules, and you are playing in their backyard, you have to follow their rules. For example, if you are engaged to value a business for a divorce in a state that excludes personal goodwill from equitable distribution, you cannot hide behind this standard to avoid carving out the personal goodwill piece of the pie. So, if you represent the nonbusiness owner-spouse, don’t think that you can get away with ignoring personal goodwill to pump up the value. Besides the fact that this is unethical (because advocacy for a client should never be done as an expert witness), the law of the land supersedes this standard. However, all other provisions of this standard will still apply.

Trugman’s book will be available in early 2022, and you can preorder if you click here. Note: If you are a subscriber to BVResearch Pro or BVR’s Digital Library, the book will be included with your subscription, so there is no need for you to preorder.

Preorder deal on the updated Business Reference Guide for 2022

The 2022 edition of the Business Reference Guide (BRG) by Tom West is now available for preorder at a 20% savings if you click here. Now in its 32nd year, it contains the latest industry-related information including “rules of thumb,” pricing tips, benchmarking information with comparison data, industry resources, and general industry data on nearly 600 types of businesses. There is also an online version with a fully searchable database, and it includes the print version of the guide.

KPMG issues fair value guide

Some potential changes are on the horizon in the world of fair value measurement. “Valuation practices continue to evolve, partly as a result of standard-setting activities and partly because of the increasing attention being paid to how climate-related risks (and opportunities) and reference rate (IBOR) reform affect the components of a valuation—e.g., cash flow projections and discount rates,” says KPMG. The firm has a new edition of its guide designed to help you apply the principles of IFRS 13 Fair Value Measurement and ASC Topic 820 Fair Value Measurement and understand the key differences between them. You can download a copy if you click here.

BV movers . . .

People: Darrell Smith has joined Prairie Capital Advisors Inc. as vice president in the firm’s Oakbrook Terrace, Ill., office and will focus on ESOP valuations and transaction advisory, fairness opinions, and other financial advisory services.

Firms: Milwaukee-based Wipfli has added GPCD Partners LLC, a full-service CPA firm that provides tax, audit, and assurance and business advisory services to clients in the Philadelphia area … Troy, Mich.-based Doeren Mayhew is adding Darlene Plumly CPA of Houston, which provides tax and consulting services to high-net-worth individuals and closely held businesses, including trusts and estates, corporations, S corporations, and partnerships … New York City-based PKF O’Connor Davies has a new location for its New York City office: 245 Park Avenue near Grand Central Station; the new location features open, centralized, and flexible workspaces … Eide Bailly is adding Plymouth, Minn.-based PWB CPAs & Advisors, which provides audit and accounting, outsourced bookkeeping, and tax services to clients in a variety of industries, including construction, restaurant/hospitality, healthcare, professional services, manufacturing, technology, and real estate … Louis Plung & Co. of Pittsburgh is adding Love Scherle & Bauer PC (LSB), which is also located in Pittsburgh … Houston-based Weaver expands its accounting advisory services practice by adding PJ LLP of Los Angeles … New York City-based Marcum LLP is adding BWTP PC of St. Louis, a firm that has eight partners and 51 associates who provide tax, accounting, consulting, and advisory services to individuals and closely held businesses across numerous industries, including construction, dental, manufacturing and distribution, medical, nonprofit, and real estate … Dubuque, Iowa-based Honkamp Krueger & Co. is adding Nigl Accounting LLP of Oshkosh, Wisc., which provides accounting, audit, tax planning, compliance, and management advisory services to a wide range of clients … New York City-based EisnerAmper LLP continues its South Florida expansion by adding West Palm Beach, Fla.-based Caler Donten Levine Cohen Porter & Veil (CDL), which provides audit, tax, and advisory services to growing and midsized companies in sectors such as family office, restaurant and hospitality, professional services, nonprofit, life science and biotech, manufacturing and distribution, real estate, and construction.

Please send your professional and firm news to us at editor@bvresources.com.

CPE events

• Sure Bet: Valuations and M&A in the Gaming Industry, December 8, 10:00 a.m.-11:40 a.m. PT/1:00 p.m.-2:40 p.m. ET. Featuring: Jack Behrens, Joe Tinucci, Scott Kellenberger, Raymond Moran, and Jason Frank. CPE credits: 2.0.

Very few industries are as exciting as the casino industry! Learn about what makes this industry tick, plus get a look at financial metrics and M&A activity—and not just about Vegas but other markets as well.

• Power Panel: Festivus Edition, December 9, 10:00 a.m.-11:40 a.m. PT/1:00 p.m.-2:40 p.m. ET. Featuring: Jay E. Fishman, Roger Grabowski, and Z. Christopher Mercer. CPE credits: 2.0.

Got a BV beef? Send it in (videos welcome) to Jaredw@bvresources.com, and join three legendary BV experts for a good-natured airing of grievances and how the profession can best move forward.