Valuation & Litigation Advisory Blog

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

• What Are the Options When Valuing Share-Based Compensation?
• The Expert's Role in Accountant Liability Cases 
• Skoda Minotti Employee Book Review Published in National Business Valuation Publication

What are the options when valuing share-based compensation?

Recently, employee stock options (ESOs) have lost some of their allure as a compensation tool. Mandatory expensing of ESOs highlights the importance of choosing an appropriate option-pricing model as well as the challenge of valuing these options in closely held companies. This article explains that selecting the wrong model can significantly distort stock option value and, therefore, the company's reported net income. The article points out that the traditional Black-Scholes approach may not adequately reflect outstanding ESOs' impact on the value of a closely held company.

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The expert's role in accountant liability cases

In lawsuits involving business failures, it's increasingly common for shareholders and other plaintiffs to name the business's accountants or auditors as defendants. An accountant's liability depends on several factors, but it's first important to know the applicable professional standard he or she uses. This article discusses those standards, along with the accountant's level of responsibility for the financial statements. A sidebar discusses the extent of an auditor's responsibility to uncover fraud.

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Skoda Minotti Employee Book Review Published in National Business Valuation Publication

We are pleased to announce that Daniel D. Golish, CPA/ABV, CVA, CFF will have a book review published in the September edition of Business Valuation Update™  (BVUpdate™), a national, monthly publication targeted at business valuation professionals.

Golish's book review of "Buy-Sell Agreements for Closely Held and Family Business Owners - How to Know Your Agreement Will Work Without Triggering It," discusses a book written by nationally-renowned valuation expert, Christopher Mercer, ASA, CFA, ABAR.

"This book is a must-read for business owners who are serious about exit planning," says Golish in his review. "Further, it can be an invaluable tool to business advisers faced with the challenge of persuading their clients to spend the necessary time and effort to devise a well-crafted, useful, and 'bomb-free' buy-sell agreement."

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.