BVR Logo June 21, 2023 | Issue #249-3

BVWire is your go-to source for the latest in the business valuation profession. Highlights for this week include:

Mercer examines the future of the BV profession

Essential reading for anyone connected to the business valuation profession is a new white paper from veteran valuer Chris Mercer (Mercer Capital). In 2021, he began taking an analytical look at the profession, which was covered in Business Valuation Update. His new white paper, published by the National Association of Certified Valuators and Analysts (NACVA), is free, and you can access it if you click here. It was first reported in NACVA’s QuickRead publication.

In the paper, Mercer considers four areas of the profession where the future will most prominently be affected—and here are some of his predictions for each:

  • Appraisal/valuation credentialling organizations (intense competition will trigger a shakeout among the three groups: the AICPA, ASA, and NACVA);
  • Business valuation standards (there will not, in the foreseeable future, be a single set of global valuation standards);
  • Business valuation theory (the new generation of appraisers will cast off some old concepts in favor of more relevant theory); and
  • Consolidation of the profession and ownership transitioning (look for more acquisitions of BV firms).

Mercer plans on doing some regular updates—and he will be speaking on the topic at NACVA’s “super” conference in Snowbird (Salt Lake City) July 12-14. For details on the conference, click here (à la carte option is available).

Kroll lowers recommended ERP to 5.5%

Kroll has decreased its recommended U.S. equity risk premium (ERP) from 6.0% to 5.5% when developing USD-denominated discount rates as of June 8, 2023. This is matched with the higher of a normalized risk-free rate of 3.5% or the spot 20-year U.S. Treasury yield as of the valuation date, says the firm in a recent update. In the same update, Kroll says the current recommended ERP in the eurozone (from a German investor perspective) remains in the range of 5.5% to 6.0%.

New case on qualifying for Subchapter V in bankruptcy

In 2020, the Small Business Reorganization Act (SBRA) added Subchapter V to Chapter 11 of the Bankruptcy Act, which changes or eliminates some of the Chapter 11 requirements, making it more debtor-friendly. This represents new opportunities for valuation analysts in bankruptcy matters. A new case is a good primer on the qualifications for a debtor to comply with Subchapter V.

Hurdles cleared: In the federal court in New York, a creditor argued that the debtor was not eligible for filing under Subchapter V. The creditor claimed that the debtor was not in commercial or business activities on the date of filing. The court disagreed and also addressed the burden of proof (it was on the debtor) and whether there was a nexus between the debtor’s business activities and the qualifying debt (there was). The court concluded that “the Debtor has met her burden of proving eligibility for subchapter V of Chapter 11 and may proceed accordingly.”

The case is In re Hillman, 2023 Bankr. LEXIS 1448, and a case analysis and full court opinion are on the BVLaw platform.

Extra: BVR has a webinar on the provisions of Subchapter V and the impact on valuations. A recording is available if you click here.

Borrowman gives BV recruiting insights on AICPA podcast

After over 25 years of recruiting talent exclusively in the business valuation profession, John Borrowman (Borrowman Baker LLC) revealed recent trends and what the profession can do to lure more young people into the fold.

Hit the campuses: One idea is to promote a stronger introduction to BV at the college level, he advised during a recent AICPA podcast, pointing out that the valuation profession is still relatively unknown among college students. The podcast’s host, Nene Gianfala (Chaffe & Associates) agreed and noted that, while some colleges do have valuation programs, many students she talks with have no clue about it. She is a guest lecturer on valuation, which is welcomed by professors and is a great way to introduce the profession to students.

They also talked about the “perfect storm” in the profession, the exit of the older generation (the Silver Tsunami) and post-pandemic labor trends. You can listen to the entire 30-minute podcast if you click here. The AICPA plans to do two podcasts per month on valuation and forensics topics.

Mark your calendar for June 27! CMS talks Stark FMV

Next week, you will have a rare chance to hear directly from a regulator, a Centers for Medicare & Medicaid Services (CMS) official, who will discuss the new definitions of fair market value (FMV) under the updated regulations for the Stark Law (the federal physician self-referral law) on a free June 27 podcast. To register, click here. The official, Lisa Ohrin Wilson, senior technical advisor, CMS, will be joined on the podcast by Alex Krouse, associate general counsel, Parkview Health, and healthcare valuation expert Tim Smith (TS Healthcare Consulting). Smith is the author/editor of The Complete Guide to Fair Market Value Under the Stark Regulations. The American Association of Provider Compensation Professionals (AAPCP) is producing the podcast. The updated regs represent a game changer in determining FMV of physician compensation—don’t miss this podcast!

Extra: For an exclusive preview of some of the remarks made during the podcast, see the July issue of Business Valuation Update.

IVSC’s Talbot to give keynote at ASA annual conference

BVWire is looking forward to hearing about how Nick Talbot got through a few near-death experiences, including being on Mount Everest for the two worst natural disasters in history. Talbot, now the CEO of the International Valuation Standards Council, will give the keynote at the American Society of Appraisers (ASA) International Appraisers Conference to be held October 1-3 in New Orleans. His session, Attempting Everest the Harder Way, will be a humorous but motivating take on living a life less usual (he was born with cystic fibrosis and had a life expectancy of 16 years). For details and to register, click here.

Next week is the deadline for BVR’s benchmarking survey

June 30 is the deadline to participate in BVR’s 15-year effort to help understand what makes a good BV practice a great one. If you have not already done so, please take the BVR Benchmarking Survey that collects data on operations, financial metrics, compensation, staffing, marketing, billing, tools and resources used, and more. The direct link to the survey is Our thanks to those of you who have already participated!

New edition of Valuation and Common Sense by Fernandez

The eighth edition of Valuation and Common Sense by Professor Pablo Fernandez (IESE Business School, University of Navarra) is now available—and it’s free if you click here. Fernandez is a highly respected BV authority and is very generous in making a great amount of material freely available to BV practitioners and global academics. The new edition has 24 thought-provoking chapters, and you can download each one from its table of contents, where you will also find a link to all of the figures and tables (in Excel format and with all calculations).

BV movers . . .

People: John Swiatkowski has joined Valuation Research Corp. (VRC) as senior vice president in the firm’s Boston office; he was previously senior manager at Deloitte Transactions and Business Analytics, where he led the firm’s efforts relating to investment manager valuations, ranging from purchase price allocations for financial reporting to the valuation of privately held alternative asset managers and carried interest stakes for estate and gift tax planning.

Firms: Farmington Hills, Mich.-based UHY LLP is adding Cadillac, Mich.-based Baird Cotter & Bishop PC, a firm with 40 professionals that offers auditing, compilation, review, payroll services, tax planning, tax compliance, estate planning, and estate tax compliance work … Richmond, Va.-based Cherry Bekaert has acquired boutique forensic and litigation consulting firm Legier & Co. of New Orleans, which provides expert witness, business interruption, and forensic accounting services … Fust Charles Chambers, a regional accounting firm in Syracuse, N.Y., has changed its name to FustCharles and has moved to a new location at 220 South Warren Street in downtown Syracuse.

Please send your professional and firm news to us at

CPE events

One of the hottest topics in business today is environmental, social, and governance (ESG), and this session will give an overview of it, the effect that ESG scores have had on investment policies and credit decisions, and the impacts of ESG on business values including the ESG components considered in the new IVSC exposure draft.

Even if you’re an advanced Excel user, you’ll learn something from this session specifically designed to improve overall efficiency when building and working with valuation models in Excel.

We welcome your feedback and comments. Contact Andy Dzamba (Executive Editor) at:


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