Archive 2012-47: Control Premiums and Minority Discounts in Operating Companies: The Facts, the Fiction and the Figments
Jim Hitchner, CPA/ABV/CFF, ASA
Webinar 47 Live Broadcast Date: March 14, 2012
This session evaluates the tools, resources and methods available to quantify lack of control/minority discounts and the value of control in the
valuation of operating companies. We will also answer the following key questions:
Is there a good source of data for minority discounts?
Is a minority discount the opposite of a control premium?
Are control premium studies a good source of data for calculating a minority discount?
Are control premiums derived from control premium studies useful and supportable?
What is the best way to calculate the value of control and the discount for lack of control?
Define a control premium, lack of control discount and minority discount
Summary of control premium resources and what’s behind the data
Linking the database explanations and text to the use of the data and its credibility
Strengths and weaknesses of control premium resources and the proper application of the data
How to properly calculate and support the value of control or the discount for lack of control/minority discount
The major problem areas in calculating control and minority discounts
Adjusting or not adjusting cash flows and/or discount rates
AICPA deliberations on control premiums and lack of control discounts including the AICPA Impairment Task Force working draft,Testing Goodwill for Impairment and the AICPA practice aid working draft, Valuation of Privately Held Company Equity Securities Issued as Compensation
The Appraisal Foundation (USPAP) deliberations on control premiums and lack of control discounts including the Appraisal Foundation working group
on control premiums
The participant will learn the best and most supportable method(s) when adding the value of control or subtracting the discount for lack of control
The participant will understand how the control premium/lack of control data and databases are compiled and how they should be used including
FactSet Mergerstat Review and the FactSet Mergerstat/BVR Control Premium Study
The participant will learn the proper levels of reliance when using control premium/lack of control data including primary, secondary and no
The participant will learn about recent deliberations and discussions from the AICPA and the Appraisal Foundation (USPAP) on control premiums and
lack of control discounts
The participant will learn how attorneys can make an expert look bad by quoting control premium information
The participant will learn how to respond to attorney attacks
The participant will see how certain uses may violate valuation standards
Included in this downloadable archived webinar package:
- Audio/Video file
- Webinar transcript
- Original Webinar handouts
You can download this archived webinar package from the shopping cart once you complete your purchase.
The archived webinar package is an Adobe Presenter PDF file that allows you to view the video of the webinar with the synced audio so that you see the presentation just as it was presented “live.” The Presenter format also allows for easy navigation through the webinar so you can quickly go to a specific section in the presentation. The handout materials are included in the file. To view the Webinar Presenter file, you must have Adobe Reader software version 9 or higher. You can download the free current version of Adobe Reader at http://get.adobe.com/reader Please note that CPE is only available for live webinar broadcasts.