November 13, 2007 Teleconference

S Corporations

Featuring Nancy J. Fannon, ASA, MCBA, CPA, ABV, BVAL of Fannon Valuations
Telephone Dial-In Audio Conference
Tuesday, November 13, 2007

10:00am -11:40pm Pacific Time

Register for Conference for $249

Register for Conference and TC Pack for $339
BVR is going green and saving you money! The new TC Pack is a CD that includes audio recording, e-transcript (in PDF), conference presentation,and all ancillary reading materials for which BVR holds the copyright.  This new product is even more valuable for our attendees – as well as for those who can’t make the session! 

Special Offer:
Register for the S Corporation telconference and save $100 on the highly anticipated publication Fannon's Guide to the Valuation of Subchapter S Corporations (regularly $329.00) .

Register today and take advantage of this special offer:
S Corporation Teleconference and Guide:
You pay only: $478.00!

Presented by Business Valuation Resources, LLC. Earn TWO INTERACTIVE CPE credits for participating in this conference. Only $249.00 for a single dial-in connection. Use your conference room and the whole office can listen in. Two CPE credits are available for each additional listener sharing the same phone connection for only $49.00 per person.

Why Should You Attend?
S corp valuation has eluded and frustrated analysts for years. On the one hand, both public and private C corporations and S corporations pay taxes on income, the former at the corporate level and the latter at the shareholder or “pass through” level. On the other hand, the S corp shareholders avoid a “second level” of tax—a tax on corporate dividends. This should mean, all things being equal, that S corps are more valuable to the investor than C corps.

At the same time, some transaction data studies indicate that S and private C corpora­tions sell for similar prices in the marketplace. How can that be, when the S corp shareholder receives the benefit of single taxation? While these questions have existed for years, they took on added significance since the controversial decisions by the U.S. Tax Court, beginning with Gross v. Commissioner. These cases ignited the debate regarding how to properly value S corporations, and analysts have been caught in the swirl ever since.

Join this teleconference with expert Nancy Fannon to hear what you need to know to bulletproof your S Corp valuations – and how to make sense of the S Corp discourse that implies this issue is still in flux when in reality it does not have to be.

Learning Objectives:

  • Learn what the S Corp “debate” has been all about
  • Review the mechanics of the traditional and simplified models
  • Discuss S corp. valuation in the context of methods other than the income approach
  • Discuss minority versus control—are the income and market transaction data really at odds?

Program Outline:

S Corporation Valuation: It Ain’t Over Yet (in fact it just started) Presentation:

  • The Issues
  • The Basics: Cash Flow and Risk—Income Approach
    • Cash Flow and Risk—Market Approach
    • Even net asset value is about cash flow and risk
    • Cash Flow and Risk—Let’s stick with income approach
  • Rate of Return for C corporations, borrowed from the public markets
    • Now let’s take it down to the individual level…
    • Now we can use the individual rate from the public market to value the S corp.
  • Now you know how to value an S corporation
  • Delaware Chancery Court – De. Open MRI
    • DE Chancery case with one little tweak . . .
  • Van Vleet’s method?
  • Considerations
    • Distributions v. Retention
    • Simplified Model
  • S corporation valuation, contrasted with C corporation valuation
    • Underlying Concepts
    • The heart of the S Corp Debate
    • Implications
    • We’re stuck with a mismatch between Rate of Return
      and Cash to Investor
    • What does this have to do with how we value the S Corp using the income approach?
    • Basic facts for a publicly traded C Corporation investor
    • “The Basic Value Calculation” Examples
    • Clearly, we have a benefit compared to the public C, who’s ROR we’ve used.  How to account for it?
    • Let’s see if this “works”
    • Why don’t the I.R.S. and the tax court decisions work?
    • Funny Money?
  • This is the “theory behind the models”
  • What if profits aren’t distributed?
  • Major Benefits of S Corporation Ownership
  • How do the models work?  Review of Models:
    • Grabowski—C Corp Equivalent: avoided dividend only
    • Comparison to Other Grabowski Methods
    • Van Vleet
    • Treharne
    • Mercer
  • S Corp Models
  • Note in particular
  • Excel Summary
  • Simplified Model
  • Now…what about all those studies comparing C and S corporations?
  • Early studies…
  • So what do we have here?
  • Series of Studies comparing S v. C corps
  • “Noise” in the transaction studies
  • What do we know about the differences between S and private C corps?
  • Pratt's Stats™
    • S Corps v. C Corps in the databases
    • Loop back to the market approach
  • Remember the very simple thing we’re trying to achieve here

Panel Includes:

Nancy J. Fannon, ASA, MCBA, CPA, ABV, BVAL
Nancy J. Fannon, ASA, CPA•ABV, MCBA is the Owner of Fannon Valuation Group, a business valuation and litigation
support services firm located in Portland, Maine. She is an Accredited Senior Appraiser (ASA) with the American
Society of Appraisers, holds the AICPA specialty designation of Accredited in Business Valuation (ABV), and is a
Master Certified Business Appraiser (MCBA) with the Institute of Business Appraisers.

Ms. Fannon has 20 years of professional valuation experience. She has been qualified as an expert witness in State
and Federal Court. She is a nationally known expert on lost profits damages, pass-through entity valuation, and the
transaction databases, and has presented dozens of speeches and authored numerous papers on these and other
areas of business valuation.

She currently is in production on several valuation textbooks, due for publication in 2007 and 2008, including Fannon's Guide to the Valuation of Subschapter S Corporations. She is a co-author of Financial Valuation—Applications and Methods, and was a contributing author for both The Business Appraiser and Litigation Support and Business Valuation and Taxes: Procedure, Law, and Perspective textbooks, has been a technical reviewer on several other textbooks including the fifth edition of Shannon Pratt’s seminal textbook, Valuing a Business, due out in the Fall of 2007.

Ms. Fannon was a member of the AICPA Business Valuation Subcommittee, the ABV Credential Committee, and has chaired the AICPA Business Valuation Conference. She is a member of the Editorial Advisory Boards of CPA Expert, Business Valuation Update, and Valuation Examiner, and is on the Panel of Expert for the Litigation and Consulting Expert. Ms. Fannon has a Bachelor of Business Administration in Accounting from the University of Massachusetts.

CPE Credit Information

Earn 2 Interactive CPE Credits (Consulting Services)
Business Valuation Resources, LLC is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN 37219-2417. NASBA Sponsor

Please note: To receive CPE credit, you must fill out the post conference survey. The survey link is e-mailed to participants along with the dial-in number and registration code, normally sent two or more days prior to the conference. CPE credit only registrants will be sent the survey link via e-mail.

Satisfaction Guaranteed:
For more information on this telephone conference or our past telephone conferences, please email Business Valuation Resources offers a 100% money-back guarantee. If you are not completely satisfied, you may submit a written request within 30 days of the date of this program to receive a full refund. Please e-mail our accounting manager at: . There are no fees associated with refunds.