Notable takeaways from the NYSSCPA BV conference

BVWire attended last week’s annual New York State Society of CPAs’ Business Valuation and Litigation Services Conference, and—as usual—some very interesting and useful information was presented. Here is some of what we heard:

• Rule-makers have started to think about the value of internally generated intangibles on company balance sheets;

• Unless valuers can substantiate distinct impacts of ESG on cash flow, risk, or growth, they’re just “blowing smoke”;

• Fair value standard-setters did such a good job with the Mandatory Performance Framework, the CEIV credential became unnecessary (the credential will be discontinued);

• New York continues to be out of step with most other jurisdictions regarding DLOMs in statutory fair value cases;

• “Litigation funding” has emerged to bring more cases to trial that would otherwise be too expensive to pursue;

• Seized crypto assets are now being disposed of via exchanges versus auctions to maximize value;

• A large forensics practice uses QLUE to investigate and trace the use of nonfungible tokens;

• ESG fraud could be a new practice opportunity for accountants and valuation experts;

• PE funds are eyeing more smaller targets than ever before;

• For matrimonial cases in New York, the valuation date can be very hard to pin down—there is no clear precedent; and

• ESG human capital disclosures are increasing, but investors want more quantitative measures, such as “regretted attrition.”

More detailed coverage of the conference will be in the July issue of Business Valuation Update.

Important podcast: CMS talks Stark FMV

BVWire has learned that a CMS official will discuss the new definitions of fair market value under the updated regulations for the Stark Law (the federal physician self-referral law) on an upcoming podcast. The official, Lisa Ohrin Wilson, senior technical advisor, Centers for Medicare & Medicaid Services, 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, and this is a rare chance to hear directly from the regulator—don’t miss it! Stay tuned for the broadcast date and registration link.

Attorney gets Daubert challenge over ESOP employment agreements

In a federal court in Georgia, an employee benefits lawyer prepared a report and was deposed regarding the process by which employment agreements were negotiated as part of a transaction involving an ESOP. The lawyer concluded that the process “was not consistent with the standards expected of a fiduciary in conducting such process.” The defendants filed a motion to exclude the lawyer’s testimony and report, arguing that he had no formal ESOP training, had given tax advice, and had not written any publications on executive compensation or valuation. But the court denied the motion, finding that the expert was qualified to issue his opinions and to testify. Among other comments the court made, it noted that the expert need not be the most qualified authority on a subject to be admitted.

The case is Gamache v. Hogue, 2023 U.S. Dist. LEXIS 54492; 2023 WL 2658033, and a case analysis and full court opinion are on the BVLaw platform.

A small thing can ruin a job interview big time

Competition for BV talent is fierce, so the last thing you want to do is let a good candidate get away—and the slightest thing could do it. In his latest newsletter, John Borrowman (Borrowman Baker LLC), a recruiter who has worked exclusively in the BV profession for over 20 years, points out a matter that may seem small but could make a big difference. If you bring in a candidate for an interview or a series of meet-and-greets, make sure you are there to bid him or her goodbye when he or she leaves. Sometimes, the end of the process can get awkward, and, if you’re not there to bookend the visit, the candidate could leave with a bad impression. If you can’t be there, Borrowman offers some tips on how to handle that. It’s almost certain that candidates are interviewing elsewhere, and, if “that employer handled this detail when you didn’t, you could lose,” he says.

Help us help the BV profession

Every business valuation firm or practice should want to know how to improve its operations, processes, and output. That’s why you should join BVR’s 15-year effort to help understand what makes a good BV practice a great one. The BVR Benchmarking Survey collects data on operations, financial metrics, compensation, staffing, marketing, billing, tools and resources used, and more. The survey is open until June 30, and the direct link is bvresources.com/2023bvsurvey. We thank those of you who have already participated!

BVWire continues on the BV conference circuit

June is busting out with two events that BVWire is looking forward to attending. First up is the CBV Connect 2023 June 8-10 in Toronto, hosted by the CBV Institute, Canada’s valuation professional organization (VPO) and standard-setter. Some of the topics of note include valuation in the metaverse, automated valuation models, the role of financial experts in ESG litigation, a “ladies of litigation” panel on damages, and much more. The event will be in-person and livestreamed. For details, click here.

Then we’ll be at the ASA’s ESOP Virtual Conference on June 20 sponsored by Empire Valuation Consultants. The agenda starts with ESOP basics then moves onto the sell-side process, addresses issues with mature ESOPs (redemption/releveraging), and finishes up with a session on litigation (“has the tide turned?”). For more details, click here.

Free webinar series from the IVSC and Kroll June 7-15

Kroll is sponsoring a series of webinars presented by the International Valuation Standards Council (IVSC) from June 7 through June 15. The 2023 Valuation Webinar Series will present four panel discussions from leading international experts on topics such as the global economic outlook, ESG, sovereign wealth funds, consistency and transparency issues, and more.

Speakers include Alistair Darling, IVSC chair and former UK Chancellor of the Exchequer; Megan Greene, Kroll chief economist and Bank of England Monetary Policy Committee (MPC) member; Mary Barth, professor of accounting, emerita at Stanford University; Marcelo Barbosa, former president of the Brazilian SEC; Doug McPhee, senior director and head of valuations for the Saudi Public Investment Fund; Louis Kujis, chief Asia economist, S&P Global Ratings; and Carla Nunes, MD, Office of Professional Practice, Kroll. For details and to register, click here.

BV movers . . .

People: Erica Bjerrum, CPA, ABV, has been named a partner at Eide Bailly; she is in the firm’s Sioux Falls, S.D., office and has been on the firm’s valuation team for the past 11 years.

Firms: New York City-based EisnerAmper moves into the Windy City by adding Morrison & Morrison Ltd. of Chicago, a firm with six partners and more than 40 professionals who provide tax, accounting, and business consulting services to clients in sectors including healthcare, technology, financial services, manufacturing, construction, and real estate … FORVIS expands into Canada with a new office in Toronto focused on providing advisory services to clients in the financial services industry … Atlanta-based Aprio LLP is adding two firms: Tobin & Collins of Hackensack, N.J., an accounting and consulting firm with a particular focus on the real estate sector, and Squire Lemkin + Co. LLP of Rockville, Md., which provides accounting, tax, financial planning, business consulting, and management advisory services focusing on high-net-worth individuals and privately held businesses … Grand Forks, N.D.-based Brady Martz & Associates moves into South Dakota by adding Sioux Falls, S.D.-based Woltman Group PLLC, a firm that provides accounting, tax, and advisory services to businesses and individuals throughout the upper Midwest … Enterprise, Ala.-based Carr Riggs & Ingram LLC increases its footprint in New Mexico by adding two firms in Las Cruces, N.M.: Everett & Boetticher PC and Kriegel/Gray/Shaw & Co.

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

CPE events

• Calculating Damages for Early-Stage Companies, May 25, 10:00 a.m.-11:40 a.m. PT/1:00 p.m.-2:40 p.m. ET. Featuring: Neil J. Beaton, Alvarez & Marsal. CPE credits: 2.0.

Damages experts walk a thin line between speculation and reasoned analysis when dealing with early-stage companies. This webinar will explore a number of credible techniques that experts can utilize to measure and/or estimate damages for new or early-stage businesses.

• Determining Reasonable Compensation + an RCReports Case Study, May 31, 10:00 a.m.-11:40 a.m. PT/1:00 p.m.-2:40 p.m. ET. Featuring: Stephen Kirkland (Atlantic Executive Consulting) and Paul Hamann (RCReports). CPE credits: 2.0.
  
  An actual case of using data for the cost, market, and income approaches for determining reasonable compensation is reviewed.

Holiday Break

BVWire will not be published next week due to the Memorial Day holiday. We will return on June 7. Have a happy and safe holiday!