The valuation date represents the point in time at which the business, or business interest(s), is being valued. Understanding the valuation date of an asset valuation, such as a privately held business, for marital dissolution is an important consideration, especially for matters which have extended over a lengthy time and those that may be impacted by significant global events such as COVID-19. An accurate and timely valuation should consider current conditions and future expectations.
In this article, we outline the four primary steps that we take to help clients conduct a stress test in light of the current economic environment and also discuss what you should do with the end results.
All fair market determinations involve assumptions regarding how buyers and sellers would behave in a transaction involving the subject asset. In a recent Tax Court case, the IRS appraiser applied a novel valuation rationale predicated on transactions that would occur involving assets other than the subject interests being valued. In its ruling, the Court concluded that this approach transgressed the boundaries of what may be assumed in a valuation.
Goodwill impairment testing is typically performed annually. But the unprecedented events precipitated by the COVID-19 pandemic now raise questions whether an interim goodwill impairment test is warranted. In this article, we discuss if your bank might need an interim impairment test and describe how an impairment test works.
One emerging trend prior to the bank M&A slowdown in March 2020 was credit unions (“CUs”) acquiring small community banks. Based upon our experience of working on transactions where CUs acquire banks, we have compiled a list of three primary valuation considerations for CUs to consider when evaluating and hopefully ultimately closing successful acquisitions of bank targets.
The COVID-19 pandemic has brought down valuations for franchisors and operators alike. Despite now being allowed to open, not all restaurants will opt to flip the switch and open their doors. There is a myriad of potential reasons, but we will highlight a couple key issues.
In the March 2020 Bank Watch, we provided our first impressions of the “reshaping landscape” created by the COVID-19 pandemic and its unfolding economic consequences. This month, we expand upon the potential asset quality implications of the current environment.
March 2020 probably will prove to be among the most dramatic months for financial markets in US history. Likewise, the fallout for banks may take a year or so to fully appreciate. Nonetheless, in this issue of BankWatch, we offer our initial thoughts as it relates to the industry.
We recognize what matters today for many funds is helping portfolio companies survive a sharp drop in revenues rather than discerning how much first quarter marks may fall from the last valuation.
SAAR1 came in at 16.70 million for December 2019, as a shortened holiday season led to volume declines of 5.8%. However, total volume was 17,047,725 for 2019, the fifth straight year above 17 million. While volumes did decline, the drop … Continued
SAAR came in at 16.844 million for January 2020, up about 1% from both the prior month and the prior year. Actual sales of 1.13 million units was slightly down from January 2019. Similarly, while SAAR was up from last … Continued
The valuation of stock options is a complex issue that divorcing parties may face during the determination and division of property. Designed to both reward performance and retain employees, these benefits can be difficult to value, particularly at a random moment for the purpose of marital dissolution.
Tarver v. Tarver- Appeal from the Circuit Court for Shelby County January 16, 2019
AICPA Issues New Forensic Services Standards
Most family law cases settle at mediation or prior to trial. For example, Tennessee requires that parties must attempt to settle their cases at mediation prior to granting a trial date. Considering both of these facts, when should a family law attorney involve a financial expert in divorce mediations?
Most financial professionals understand that goodwill impairment testing is typically performed annually, usually near the end of a Company’s fiscal year. In fact, many companies just completed an impairment test as of year-end 2019. But the unprecedented events precipitated by the COVID-19 pandemic now raise questions about whether an interim goodwill impairment test is warranted.
To close our series on community bank valuation, we focus on concepts that arise when evaluating a controlling interest in another bank, such as arises in an acquisition scenario. While the methodologies we described with respect to the valuation of minority interests in banks have some applicability, the M&A marketplace has developed a host of other techniques to evaluate the price to be paid, or received, in a bank acquisition.
A new year brings new opportunities and challenges in the world of fair value accounting. The Wall Street Journal’s recent coverage of the potential changes coming to goodwill impairment testing and the increased scrutiny around private equity portfolio company valuations signals that fair value issues continue to be top of mind for investors, companies, and regulators. Here are four key areas worth watching in 2020.
Tax-Affecting Is Not the Only Interesting Issue in This 2019 Tax Court Case
Many people believe that the win/loss ratio doesn’t have much effect on revenues and attendance. They believe the local team has loyal fans who will attend games despite their performance. We investigate that assumption in this article focusing on Major League Baseball (MLB) by sampling a top tier, middle tier, and lowest tier team.
This article discusses a number of considerations that buyers may want to assess when performing due diligence on a potential FinTech target. While the ultimate goal is to derive a sound analysis of the target’s earning power and potential, there can be a number of different avenues to focus on, and the QoE study should be customized and tailored to the buyer’s specific concerns as well as the target’s unique situations.
Bank fundamentals did not change a lot between 2018 and 2019; however, bank stock prices and the broader market posted strong gains following a short but intense bear market that bottomed on Christmas Eve 2018. Our expectation is that 2020 will not see much change in fundamentals either, while bank stocks will require multiples to expand to produce meaningful gains given our outlook for flattish earnings.
In our family law practice, we serve as valuation and financial forensic expert witnesses. There is typically another valuation expert on “the other side.” In several recent engagements, the following topics, posed as questions here, were raised as points of contention. We present them here to help the reader, whether you are a family law attorney or a party to a divorce, understand certain valuation-related issues that may be raised in your matter.
While it would streamline the valuation process, there is no single value for a bank that is applicable to every conceivable scenario giving rise to the need for a valuation. Instead, valuation is context dependent. This edition of the series focuses on the valuation of minority interests in banks, which do not provide the ability to dictate control over the bank’s operations. The next edition focuses on valuation considerations applicable to controlling interests in banks that arise in acquisition scenarios.