December 17, 2018
Although it is easy to look at historical financial statements to get an idea of the value of a business, it is often helpful to take a closer look at many income and expense items. Normalizing adjustments often need to be made to determine the true historical and prospective earnings capacity. This blog looks at an example of where normalizing adjustments are generally made to a company’s income statement in the valuation process.
December 12, 2018
It was announced on December 11, 2018 that the Agriculture Improvement Act of 2018 (AIA) is through reconciliation between the House and the Senate. The bill removes “hemp” from the definition of “marihuana” under the Controlled Substance Act (CSA). This effectively makes the cultivation, processing, extraction, manufacture, and retail of hemp legal under Federal law.
November 27, 2018
A company’s revenue can significantly impact value. A deep dive into the details of the sales number on the P&L often provides some insight that will assist a potential buyer in determining how much the business is worth. This blog examines a few issues to be considered when examining the top line.
November 14, 2018
One of the first pieces of information that should be determined in any valuation engagement is the standard of value. The standard of value provides a roadmap for the valuator to reach a conclusion of value. Oftentimes, the standard of value is dictated by the purpose of the engagement. The three primary standards of value are explored below.
November 8, 2018
Beginning with applications for 2019, taxpayers must apply separately for the Partial Tax Exemption for Real Property of Senior Citizens (the senior citizens or aged exemption) and the “Enhanced school tax relief program (STAR) exemption.
November 5, 2018
Prior to the Tax Cuts and Jobs Act (TCJA), businesses could deduct up to 50% of total meals and entertainment expenses incurred in connection with a bona fide business purpose. The 2017 TCJA uprooted this deduction by specifically prohibiting any deductions for expenses considered to be entertainment, amusement, or recreation (“entertainment expenses”). While it was made clear that entertainment expenses would no longer be deductible, the act lacked clarification related to the deductibility of business meals, until now.
October 29, 2018
On August 17th, the IRS issued a private letter ruling that approved an amendment to a company’s 401(k) plan to allow the employer to make 401(k) contributions on behalf of employees who are actively paying off student loans.
October 26, 2018
The Market Approach is commonly used by business valuation experts to determine value. The basis for the approach is similar to residential real estate appraisers using “comps” to determine a home’s value. This blog post will look at how the Market Approach is used to value businesses as well as the strengths and potential shortcomings of the approach.
October 22, 2018
The Tax Cuts and Jobs Act (“TCJA”) passed late in 2017 introduced a new deduction for business owners. Individuals who own and/or operate qualified business activities can deduct up to 20% of their qualified business income.
October 17, 2018
When comparing two companies, it may seem very logical that a business that makes more money is worth more than another business with smaller earnings. However, business’ are often exceedingly complex and need to be examined in greater detail.