Questions and Answers

A FREE Q&A periodical to promote education, build consensus, and answer your questions in the financial valuation and litigation services profession.

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VPS Q&A - Issue 18 – March 2010

Developing a WACC for a minority interest - Jim Hitchner, CPA/ABV/CFF, ASA, Valuation Products and Services, LLC, Financial Valuation Advisors, Inc. and The Financial Consulting Group, LLC
Beta coefficients and R-squared (coefficient of determination) - Bob Duffy, CPA/ABV, CFA, ASA, partner in the Valuation Services Group of Grant Thornton
Stock acquisition in established market and marketability discount - Linda Trugman, CPA/ABV, MCBA, ASA, MBA, Trugman Valuation Associates, Inc.

VPS Q&A - Issue 17 - December 2009

Interest-Bearing Debt in a Dissenting Shareholder Action - Gilbert E. Matthews, CFA, Sutter Securities Incorporated
S Corps and Taxes - Chris D. Treharne, ASA, MCBA, BVAL, President of Gibraltar Business Appraisals, Inc.
Fair Market Value with Compulsion to Sell? - Kevin R. Yeanoplos, CPA/ABV/CFF, ASA, the Director of Valuation Services for Brueggeman and
Johnson Yeanoplos, P.C.

VPS Q&A - Issue 16 - November 2009

Workpapers Retention - Jim Alerding, CPA/ABV, ASA, CVA, Clifton Gunderson, LLP
Delisting Adjustments - - Jim Hitchner, CPA/ABV/CFF, ASA, Valuation Products and Services, LLC, Financial Valuation Advisors, Inc. and The Financial Consulting Group, LLC
Asset vs. Stock Deals and Amortization Adjustments – Steve Hyden, CPA/ABV, ASA, The Financial Valuation Group

VPS Q&A - Issue 15 - September 2009

Time Period for Transaction Multiples – Nancy Fannon, ASA, CPA/ABV. MCBA, Fannon Valuation Group
Valuation Issues In Biotech R&D Firms – Neil Beaton, CPA/ABV, CFA, ASA, Partner in Charge, Valuation Services Group, Grant Thorton
AICPA BV Standards - Jim Alerding, CPA/ABV, ASA, CVA, Clifton Gunderson, LLP

VPS Q&A - Issue 14 - July 2009

Reporting and Standards for Very Small Businesses - Jim Alerding, CPA/ABV, ASA, CVA, Clifton Gunderson, LLP
The WACC in Fair Value for Financial Reporting - Steve Hyden, CPA/ABV, ASA, The Financial Valuation Group
Debit and Invested Capital - Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.

VPS Q&A - Issue 13 - June 2009

The Total Beta Model for Determining Company-Specific Risk - Bob Duffy, CPA/ABV, CVA, ASA, Grant Thornton; Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.; Peter Butler, ASA, CFA and Keith Pinkerton, ASA, CFA
Resources for Obtaining Guideline Public Company Method Information - Eva Lang, CPA/ABV, ASA, Valuation Products and Services and the Financial Consulting Group
SSVS No. 1, Reports and Litigation - Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.

VPS Q&A - Issue 12 - April 2009

Equity Risk Premiums - Duff & Phelps vs. Ibbotson - Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.
Level of Reliance on the Guideline Company Transaction Method - Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.; Shannon Pratt, CFA, FASA, MCBA, CM&AA, Shannon Pratt Valuations; Jay Fishman, FASA, Financial Research Associates
Discounts in Healthcare Entities, continued - Mark O. Dietrich, CPA/ABV, Dietrich & Wilson, PC

VPS Q&A - Issue 11 - March 2009

Size Risk Premiums for Larger Companies - Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.
Discounts in Healthcare Entities - Mark O. Dietrich, CPA/ABV, Dietrich & Wilson, PC
Estate Tax Valuations and Valuation Dates - Jim Alerding, CPA/ABV, ASA, CVA, Clifton Gunderson, LLP

VPS Q&A - Issue 10 - February 2009

Time Periods for the Income and Market Approaches
Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.
Reliance on Other Appraisals Prior to Valuation Date
Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.
Goodwill Impairment Step One: Testing and Debt
Steve Hyden, CPA/ABV, ASA, The Financial Valuation Group

VPS Q&A - Issue 9 - January 2009

AICPA SSVS NO. 1 Calculation Engagements
Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.
The Relationship Between Discount Rates and Projected Losses/Profits
Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.
Reporting Requirements, Discount Studies and Change of Scope
Linda Trugman, CPA/ABV, MCBA, ASA, MBA, Trugman Valuation Associates, Inc.
Jim Alerding, CPA/ABV, ASA, CVA, Clifton Gunderson, LLP
Ed Dupke, CPA/ABV/CFF, ASA, Clifton Gunderson, LLP
Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.

VPS Q&A - Issue 8 - December 2008

Consideration and Reliance on Buy-Sell Agreements
Timothy R. Lee, ASA, Senior Vice President, Mercer Capital Management, Inc
Time Horizon for Lost Profits Calculations
Michael G. Kaplan, CPA, CVA, CFFA, ABV, Voir Dire Partners, LLC, and Kaplan Abraham Burkert & Company, Litigat
Application of Restricted Stock Studies for DLOMs
Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.

VPS Q&A - Issue 7 - October 2008

New Risk Premium Data From Morningstar Ibbotson
Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.
Pre-IPO Studies And Discounts For Lack Of Marketability
Brian Pearson, CPA/ABV/PFS, ASA, Valuation Advisors, LLC
Using Duff & Phelps Risk Premium Data
Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and Financial Valuation Advisors, Inc.

VPS Q&A - Issue 6 - August 2008

Discount Rates for Lost Profits Analyses
Michael G. Kaplan, CPA, CVA, CFFA, ABV, Voir Dire Partners, LLC, and Kaplan Abraham Burkert & Company, Litigat
Premiums for Control
Neil Beaton, CPA/ABV, ASA, CFA, Grant Thornton.
Size Premium vs. Leverage Premium
Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and The Financial Valuation Group

VPS Q&A - Issue 5 - July 2008

Morningstar (Ibbotson) Size Premium Data
- Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and The Financial Valuation Group
Valuation/Appraisal Review of Another Analyst's Work
- Jim Alerding, CPA/ABV, ASA, CVA, Clifton Gunderson, LLP
Corporate Director Compensation Source
- Eva Lang, CPA/ABV, ASA, the Financial Consulting Group
Compensation Adjustments in Valuation
- Ron Seigneur, CPA/ABV, CVA, MBA, Seigneur, Gustafson, LLP

VPS Q&A - Issue 4 - May 2008

Reconciliation and Weighting of Valuation Methods and Approaches - Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and The Financial Valuation Group
Tiered Discounts in FLP Valuation Approaches - Linda Trugman, CPA/ABV, MCBA, ASA, MBA, Trugman Valuation Associates, Inc.
Practice Management and Lack of Testifiers - Steven Babitsky Esq. and James J. Mangraviti Jr., Esq., partners in SEAK, Inc.

VPS Q&A - Issue 3 - April 2008

Company-Specific Risk Premiums - Linda Trugman, CPA/ABV, MCBA, ASA, MBA, Trugman Valuation Associates, Inc.
A Business Broker’s View of Investment Value vs. Fair Market Value in Small Business Transactions - Wayne Quilitz, Murphy Business & Financial Corporation, Murphy Valuation Services, Inc.
Marketability/Liquidity Discounts for Controlling Interests - Neil Beaton, CPA/ABV, ASA, CFA, Partner in Charge, Valuation Services Group, Grant Thornton
Weights in the Weighted Average Cost of Capital - Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and The Financial Valuation Group

VPS Q&A - Issue 2 - March 2008

FLP Discounts - Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and The Financial Valuation Group
Rates of Return for Higher Risk Companies - Eva Lang, CPA/ABV, ASA, the Financial Consulting Group and Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and The Financial Valuation Group
Practice and Risk Management - Mike Mard, CPA/ABV, ASA, The Financial Valuation Group
Conflicts of Interest - Jim Alerding, CPA/ABV, ASA, CVA, Clifton Gunderson, LLP

VPS Q&A - Issue 1 - February 2008

S Corp Premiums - Nancy Fannon, CPA/ABV, ASA, MCBA, Fannon Valuation Group
Duff & Phelps Risk Premiums - Rod Burkert, CPA/ABV, CVA, MBA, Burkert Valuation Advisors, LLC
QMDM Acceptance - Chris Mercer, ASA, CFA, Mercer Capital
BV Standards - Calculation Engagement - Jim Hitchner, CPA/ABV, ASA, Valuation Products and Services and The Financial Valuation Group