This month's issue of Valuation & Litigation Advisory Insights includes the following articles:
- Tips to Increase the Value of Your Business
- Nonqualified Deferred Compensation: Independent Appraisals Offer Protection Against 409A Challenge
- ESOPs Put a Premium on Business Valuation
Tips to Increase the Value of Your Business
By: Sean Saari, CPA/ABV, CVA, MBA
Having been involved with hundreds of valuation engagements, we have seen the good, the bad and the ugly of company values. What we have found is that the companies with the highest values tend to have a few operational characteristics in common. With that in mind, we would like to share a handful of tips based on what we have seen in place at high-value companies that you can consider when working to increase the value of your business.
Nonqualified Deferred Compensation: Independent Appraisals Offer Protection Against 409A Challenge
Businesses that provide employees with stock options, stock appreciation rights (SARs) and other types of nonqualified deferred compensation have been subject to Internal Revenue Code Section 409A for years. As you can imagine, compliance is particularly challenging in the current economic environment. To avoid Sec. 409A problems, options and SARs must be issued at or above fair market value, so accurate valuations are critical. It’s important to know what Sec. 409A requires and how to establish fair market value. Three “presumptive” valuation methods are discussed.
ESOPs Put a Premium on Business Valuation
Employee stock ownership plans (ESOPs) offer many benefits to business owners and their employees. To preserve these benefits, a qualified, independent appraisal of the company’s stock is essential. This article discusses an ESOP’s many benefits and explains how its specific characteristics and complexities present unique valuation challenges.
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If you have any questions about any of these articles, post a comment below or please contact our Valuation & Litigation Advisory Services Group at 440-449-6800.