Willamette points up practice opportunity regarding property taxes

Tax assessors sometimes improperly inflate ad valorem property tax bills on industrial and commercial properties by including the value of the taxpayer’s intangible assets, which are not subject to property taxes in some jurisdictions. An article in the just-released Winter 2022 issue of Insights from Willamette Management Associates discusses this and summarizes the generally accepted approaches and methods related to the valuation of taxpayer intellectual property. In particular, the article focuses on the market approach—and the relief from royalty (RFR) method—related to the valuation of the taxpayer’s intellectual property. The article, “Intellectual Property Valuations for Property Tax Purposes,” was written by Barry W. Purnell, Robert F. Reilly, and Charlene M. Blalock.

What to do: Examine your local area to see whether the laws exempt certain intangible assets from commercial property taxes. You may have clients who have overpaid their property taxes if the value of intangibles was improperly included in the assessment.

Damages expert dodges exclusion bullet

In a patent infringement case in Tennessee, the defendants filed a motion to exclude the testimony of the damages expert for the plaintiffs. The product in question was medical technology used during surgery. Among the arguments for exclusion was that the expert failed to offer reliable testimony to meet his “but for causality” burden for lost profits damages. They also challenged his reasonable royalty rate. The plaintiffs contended that the expert had a reliable foundation for his opinions and any issues the defendants had should be dealt with during cross-examination and not exclusion. The defendants’ motion was denied, and the expert’s testimony was not excluded.

The case is Xodus Med. v. Prime Med. (II), 2021 U.S. Dist. LEXIS 240473, and a case analysis and full court opinion can be found on the BVLaw platform.

Extra: Get a recap of the most notable valuation-related court cases during a February 15 webinar, BVLaw Case Update, hosted by Jim Alerding, who will be joined by fellow valuer Jim Ewart and attorney Andrew Z. Soshnick.

Year-end 2021 data now in the Cost of Capital Professional

Year-end 2021 data, including equity risk premia, CRSP decile size premia, and industry betas/IRPs, are now available in BVR’s Cost of Capital Professional platform. The platform is a simple, transparent, and cost-effective service for estimating the cost of capital and is designed to bring more professional judgment and common sense back into the process, which has become too much of a complex “black box” of applied mathematics. It supports the buildup method and CAPM calculations for any valuation date. It also gives you the flexibility to choose the start year for historical return data based on what segment of history you believe best offers a reasonable basis to make estimates of expected future returns. For a personalized demo of the platform, click here.

NACVA adds 51 newly credentialed members

The National Association of Certified Valuators and Analysts (NACVA) has more credentialed appraiser members than both the AICPA and American Society of Appraisers (ASA) combined. In the fourth quarter of 2021, 87 NACVA members earned their credentials, according to an announcement. Of these members, 78 earned the Certified Valuation Analyst (CVA) credential, one earned the Master Certified Business Appraiser (MCBA) credential, and eight members earned the Master Analyst in Financial Forensics (MAFF) credential. These members completed the training, exam, and credentialing processes for the two credentials.

New book on valuing fractional interests

For almost 25 years, valuing fractional interests involving real estate has been the specialty of Dennis A. Webb (Primus Valuations). He is a real estate appraiser as well as a business valuation expert, and he has updated his approach, which is explained in his new book, Valuing Fractional Interests in Real Estate 2.0. The approach relies primarily on income methods using public limited partnership and REIT market returns. He presents the updated methodology by examining the methods in use today and understanding how and why they are replaced by or used in the new approach. He also stresses the importance of telling the story behind the valuation that makes sense to the user of your report. Webb also has developed a new online application, the Partner Value Expert (PVX), that embodies his new approach.

2021 Thomas Burrage Award recipient named

The Expert Resource Connection (ERC) has bestowed this year’s Thomas Burrage Award upon Gail Markham, CPA, ABV, CFF, CFE, and CFP®. She is a Florida Supreme Court certified family mediator and partner at Markham Norton Mosteller Wright & Co. PA (MNMW), a public accounting and consulting firm with offices in both Fort Myers and Naples. This award honors professionals who display expertise in the business valuation and forensic accounting industry and offer mentorship to future leaders and philanthropy in their community. The ERC trustees shared that “Gail is passionate about everything she does. For decades, she has provided the best to her clients in various situations while generously supporting the local community with her time, talent, and treasure. In addition, she is a critical problem solver and takes the time to support our future professionals through leadership and mentorship.”

While the late Thomas Burrage was highly respected for his expertise in litigation, forensic accounting, business valuation, and taxation, he is remembered most as a kind and generous man who gave back to the profession. It is in that spirit that the award is given. Prior recipients of the award have been Bob Duffy, Mike Crain, Kevin Yeanoplos, Jim Hitchner, and Karen Warner.

European goodwill impairment up 49% in 2020

Total goodwill impairment recorded by European-listed companies in the STOXX® Europe 600 increased for the third consecutive year, rising 49%, to €54.1 billion (bn) in 2020, according to the “2021 European Goodwill Impairment Study,” from Kroll. Spain had the highest aggregate amount of goodwill impairment in 2020, followed by the United Kingdom. Overall, the top three industries with the most significant increase in goodwill impairment amounts in 2020 are (in order of magnitude): financials and real estate, materials, and communications services.

BV movers . . .

People: Ryan Leininger, CPA, CVA, has joined Maumee, Ohio-based Gilmore Jasion Mahler (GJM) as a consulting and assurance partner; his areas of specialization include construction and real estate as well as manufacturing and distribution … Arlene Towarnicke has become a principal at RSM US LLP; she is the leader of the firm’s complex financial instrument team within its valuation practice and has extensive experience in valuing complex securities and derivatives for financial reporting purposes.

Firms: Capstone Certified Public Accountants LLC, a firm that offers traditional tax and financial services, with additional specialty offerings such as financial audits, divorce/separation services, wealth management, litigation support, and business valuations, recently acquired Evans, Bartlett, Higbe and Porte of Prineville, Ore. … Savannah, Ga.-based Hancock Askew & Co. LLP is adding Mason Advisory Group of Atlanta, a firm that specializes in tax and accounting services for individuals and businesses, with industry expertise in the areas of real estate, healthcare, professional services, hospitality, and manufacturing … Chicago-based Baker Tilly has acquired healthcare IT professional services and consulting firm Orchestrate Healthcare of West Palm Beach, Fla.; the firm has a 120-person team that works to improve performance within the processes and systems of healthcare providers … New York City-based Marcum LLP is adding Saddle Brook, N.J.-based RotenbergMeril, a firm whose capabilities in SEC services was particularly noted … Enterprise, Ala.-based Carr Riggs & Ingram LLC (CRI) is adding two Southwest firms: Jensen Accountancy International LLC of El Paso, Texas, with a focus on manufacturing and distribution; and Ricci & Co. LLC of Albuquerque, N.M., that has a specialty in the construction industry … Two Houston-based firms have merged: Reimer, McGuinness & Associates and Hess Hopkins Alexander; the combined firm is known as Reimer McGuinness Hess PC (RMH).

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

CPE events

• BVLaw Case Update, February 15, 10:00 a.m.-11:40 a.m. PT/1:00 p.m.-2:40 p.m. ET. Featuring: R. James Alerding (Alerding Consulting LLC), James D. Ewart (James D. Ewart LLC), and Andrew Z. Soshnick (Faegre Drinker Biddle & Reath LLP). CPE credits: 2.0.

Join veteran valuation expert and BVR’s legal editor, Jim Alerding, as he welcomes fellow valuator Jim Ewart and family law attorney Drew Soshnick for a discussion of some of the most consequential recent valuation and financial litigation decisions from state and federal courts.

• Shining a Spotlight on Nightclub Valuation, February 16, 10:00 a.m.-11:40 a.m. PT/1:00 p.m.-2:40p.m. ET. Featuring: Lynton Kotzin (JS Held) and Jason Pierce (JS Held). CPE credits: 2.0.

How do you translate the excitement of nightclubs into value? This session discusses the nuances of valuing bars and clubs, including deconstructing the revenue streams, matching the risk to the business model, properly applying transaction multiples and other benchmarks, and utilizing lessons learned from court cases.