Valuation & Litigation Advisory Blog

This month's issue of Valuation & Litigation Advisory Insights includes the following articles:

• International Business Valuation Standards: A Forecast for U.S.-Based Business Valuation Experts
• Is the Price Right? Ask an Expert.
• How Contingencies Affect a Business's Value

International Business Valuation Standards: A Forecast for U.S.-Based Business Valuation Experts

I feel completely surrounded—like the Spartans in the Battle of Thermopylae, chronicled in the movie 300 and elsewhere. Rather than being encircled by Xerxes’s Persian army, however, my plight is much more benign (and much less bloody). I’m being bombarded by articles discussing the convergence of U.S. generally accepted accounting standards and International Financial Reporting Standards (IFRS). Exposure drafts for revised standards developed jointly by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been released. The Securities and Exchange Commission (SEC) may require U.S. public companies to begin using IFRS in place of U.S. GAAP as soon as 2015.

All of this activity raises the question: As accounting standards move toward convergence, are valuation standards headed in that direction as well?

Click here to read the rest of this article, recently published in Business Valuation Update.

Is the Price Right? Ask an Expert.

As the economy continues to recover, merger and acquisition (M&A) activity is picking up steam. In the current environment, however, making or evaluating an offer can be challenging.

Click here to read this article which shows how obtaining a fairness opinion from an objective, independent business valuation expert can help M&A participants and their management defend themselves against shareholder claims.

Gazing Into the Crystal Ball

As part of the definition of "fair market value," both parties in a transaction must have "reasonable knowledge of the relevant facts." But a host of contingencies are often among the relevant facts, which means that valuators need to look into the future to arrive at fair market value. Both contingent losses and contingent gains must be considered, and they differ in their accounting treatment. For the valuator, the challenge is to quantify any contingencies and adjust the company’s value accordingly.

Click here to read about how contingencies affect a business’s value.

Prior issues are available in the E-Newsletter Archive of our Valuation & Litigation Advisory Services Resource Center. If you would like to subscribe to this free, monthly, business valuation and litigation support e-newsletter, send an email to info@skodaminotti.com.

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.