Latest BVR benchmarking survey is now live

Hundreds of business valuation practices and firms have participated in BVR’s ongoing benchmarking survey since it was first launched in 2007. The survey collects the most comprehensive data on operations, financial metrics, compensation, staffing, marketing, billing, tools and resources used, and more. Valuation experts use it to see how they and their firms compare with their counterparts and to pick up some ideas on how to improve their practices.

Survey link: The 2023 version of the survey is now live, and a direct link to it is surveymonkey.com/r/RVYDLRB. The deadline for participating is June 30. The length of the survey has been reduced, so it will not take as much time as previous versions.

All responses will be confidential, but we will give survey respondents the opportunity to participate in rankings that identify top-performing practices. Participants will get a free executive summary, a discount on the full study, and some other perks.

What’s more, BVR has partnered with leading BVFLS practice management expert Rod Burkert (Burkert Valuation Advisors) to help ensure the survey and resulting study will be of the most help to BV practices.

Thank you in advance for participating!

Fair value credential to be sunset, conference speakers say

The news that the Certified in Entity and Intangible Valuations (CEIV) credential was being discontinued stunned some attendees at the ASA Fair Value Spring Conference in New York City on May 4. The CEIV credential was a joint effort of the AICPA, ASA, and RICS that began in 2014 and was launched in 2017.

Valuation practices, including the Big Four, embraced the program, and many practitioners went through the training, but some firms stopped short of requiring their people to be credentialed. During the credential’s development, there were concerns over such issues as quality control and client confidentiality, BVWire reported at the time.

MPF will endure, At the conference, speakers reported that the Mandatory Performance Framework (MPF) will continue to be used. In fact, a revision is in the works to make it more streamlined and some credentialing groups will incorporate it into certification training. The MPF was designed to make sure that the valuation expert adequately documents his or her work and thought processes. Better documentation helps make auditors more comfortable with valuation estimates, especially for intangibles, and it eases the concerns of the SEC and PCAOB.

At this point, the credentialing organizations are working through details of the sunsetting process, and more information will be forthcoming.

More news from the ASA Fair Value Conference

In addition to the news that the CEIV credential was being discontinued (see previous item in this issue), here are some other takeaways from the ASA Fair Value Spring Conference in New York City on May 4:

• The current economic picture is seen as transitory, and there have been no major changes to long-term growth rates being used (a range of 2% to 2.5% was mentioned);

• The Big Four are eyeing AI (“you can’t fight machines”), and they are learning how to harness it—they don’t see its use in business valuation rising to the level that it has with real estate appraisals;

• Aswath Damodaran (New York University Stern School of Business) continued his strong criticism of the environmental, social, and governance (ESG) movement;

• For fund valuations, experts are focusing more on the annual operating plan, taking a more forward-looking approach;

• Fair value concepts do not pay enough attention to the legal boundaries of protection with respect to technology and intellectual property assets, which have a “huge” impact on value; and

• A final version of the AICPA’s business combinations guide is expected to be issued in Spring 2024.

A more detailed recap of the conference will be in the June issue of Business Valuation Update.

Financial expert guide added to BVResearch Pro

The Financial Expert Guide for Family Law Judges and Attorneys, National Edition, is now on your digital bookshelf if you are a subscriber to the BVResearch Pro platform. The book, written by attorney John Tatlock and valuation experts Kevin Yeanoplos and Ron Seigneur, shows judges and attorneys the fundamental building blocks of the valuation analysis for a business. It begins with the discussion of the essential standards and premises of value that must apply in every valuation engagement, followed by the analysis of the business owners’ reasonable compensation and the specific recognized approaches and methods for conducting and reporting the results of a valuation analysis. There is also a full-blown Conclusion of Value report judges and attorneys should expect to see from experts.

If you are not a BVResearch Pro subscriber, you can purchase the book if you click here.

New BV workflow tool makes PDF tax document conversion a breeze—free webinar!

When we talk with practitioners about their engagement workflows, the laborious process of converting client tax documents from PDF to Excel regularly tops the list of steps that take far too much time—and usually requires manual data entry. The new TaxXL tool—now offered by BVR—is a welcome game changer! Developed for business valuation professionals by Nambri, TaxXL converts PDF tax forms to Excel spreadsheets quickly and accurately.

The BVR team was duly impressed—you can see it in action during a free webinar on Tuesday, May 16, at 1 p.m. EST. Register for the free webinar here, and learn more about TaxXL here.

Next stops on the BV conference circuit

Tomorrow, May 11, BVWire will be at the 2023 Houston ASA Energy Valuation Conference, which is live on-site and will also be livestreamed (by BVR). This is a full-day event that will cover a range of important topics within the industry including the transition of power generation from fossil fuel to noncarbon, renewables, sustainable energy, and environmental, social, and governance (ESG) energy issues.

Then, BVWire will be at the annual New York State Society of CPAs’ Business Valuation and Litigation Services Conference on May 15. A slate of notable speakers, including Chris Mercer, Mark Zyla, Adam John Wolff, and more, will appear at the event, which will be on-site in New York City and also online. Topics include a fair value measurement update, statutory fair value and DLOM, valuation issues in matrimonial litigation, litigation finance, crypto assets and NFT matters, the latest on private equity M&A, ESG human capital disclosures, and more.

New study of inflation and valuation in German firms raises concerns

A new paper finds that company-specific inflation rates assumed for the steady state are lower than the expected general inflation rates. This should not be the case regularly or on average, respectively, the authors argue. They examined 263 valuation reports for Germany-listed firms with a valuation date between 2000 and 2021, mostly for the purpose of determining the price per share to compensate minority shareholders during a squeeze-out. The results of the analysis are from a time when expected inflation was much lower than recently. “Inflation-induced value effects will increase, if a company’s specific inflation rate is not adjusted to higher expectations about future inflation,” the authors write. They also point out that a company-specific inflation rate can fluctuate based on differing inflation expectations in the markets in which the company is operating. “This challenges the usual assumption that the company specific inflation rate is constant, thereby also challenging the use of the perpetuity formula after a detailed cash flow forecast for a few years.”

The paper is “Inflation and Valuation Practice: German Evidence” by Andreas Schüler and Sebastian Wünsche and is available if you click here. The paper is published in the Schmalenbach Journal of Business Research.

BV movers . . .

People: John Waybright has been admitted as a principal in the valuation services department at Troy, Mich.-based Rehmann LLC; he will be based out of the firm’s Orlando, Fla., office and his primary focus will be on growing the valuation services practice, which specializes in providing business valuations for financial reporting and estate and gift tax purposes.

Firms: Pittsburgh-based Schneider Downs & Co. Inc. is expanding its consulting and business advisory practice with the addition of five strategic and transaction advisory consultants from boutique consulting firm Springer Lawson & Associates (SLA) of Reston, Va. … Fort Worth, Texas-based Whitley Penn LLP is acquiring Cogenics Consulting of San Francisco, which utilizes data analytics to offer new perspectives on financial forecasting, analysis, and strategic planning … Chicago-based RSM US LLP is acquiring human capital management technology consulting firm Wise Consulting Associates of Timonium, Md. … Grand Forks, N.D.-based Brady Martz & Associates is expanding into South Dakota by adding Sioux Falls, S.D.-based Woltman Group PLLC, which provides accounting, tax, and advisory services to businesses and individuals throughout the upper Midwest.

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

CPE events

• 2023 Houston ASA Energy Valuation Conference: A BVR Live Webcast, May 11, 6:15 a.m.-4:00 p.m. PT/9:15 a.m.-7:00 p.m. ET; full-day conference with various speakers. CPE credits: up to 8.0.

BVR is pleased to partner with the Houston Chapter of the ASA to present the webcast of the 2023 ASA Energy Valuation Conference, which features presentations from nationally recognized speakers who are profession leaders covering a range of important topics within the industry.

• FREE WEBINAR: Turn PDF Tax Returns Into Excel Spreadsheets in Minutes—TaxXL, May 16, 10:00 a.m.-10:50 a.m. PT/1:00 p.m.-1:50 p.m. ET. Featuring: Murali Minnah and Nataliya Kalava (Nambri Technologies). CPE credits: 1.0.

  In this webinar, we will identify the financial aspects of the subject company that are fundamental to valuation and demonstrate how to use Nambri TaxXL—now offered by BVR—to convert PDF tax forms to Excel spreadsheets. Then, we will use the export from TaxXL to perform a financial analysis of the subject company.