Archive 2010-22: Valuing Small Businesses for Divorce




Archive Webinar 2010-22:Key Issues in the Valuation of Small Businesses for Divorce

presented by
Chris Hamilton, CPA, CFE, CVA, DABFA,
Michelle Gallagher, CPA/ABV/CFF
and Ron Seigneur, CPA/ABV/CFF, ASA, CVA

Webinar 22 Original Broadcast Date: February 25, 2010

Learning Objectives:

  • The participant will learn the issues that can make valuations of small businesses and professional practices more difficult than larger businesses
  • The participant will learn how to deal with practice goodwill vs. personal goodwill vs. key person vs. noncompete agreements
  • The participant will learn about what valuation approaches and methods work and those that don’t
  • The participant will learn about dealing with normalization adjustments including non-market compensation issues
  • The participant will learn about tax affecting pass through entities
  • The participant will learn about BV standards and the use of calculations and calculation reports
  • The participant will learn about issues in the down economy

Webinar Outline:

  • Examples and techniques for separating personal/professional and business/practice goodwill in divorce valuations
    • Quantitative methods
    • Qualitative methods, e.g. Multi-attribute Utility Model
    • Noncompetes as proxies
    • Key person issues in small practices
    • Excess earnings problems
      • Is there any goodwill if there are no excess earnings
  • Valuation approaches and methods and levels of reliance
    • Guideline company transaction method and supporting databases
      • Data constraints and level of reliance – primary vs. corroborating
      • Statistical techniques, e.g. Direct Market Data Method
      • Rules of thumb
      • Buying a job values
    • Capitalized earnings/cash flow method
      • Rate of return inputs
      • Specific company risk methods
        • Qualitative
        • Quantitative
          • Butler Pinkerton Total Cost of Equity
          • Risk weighting models, e.g., Build Up Summation Model
      • Weighting of historical earnings
    • Normalization adjustments
      • Compensation
        • Sources and reliability of data
        • Are valuation analysts qualified to make these adjustments
      • Control vs. minority
      • Taxes
      • Depreciation
      • Working capital
      • Non-operating assets and perks
  • Pass through entities/S Corps and taxation
    • Tax affecting and calculation of S Corp premiums
    • What to do in a state that does not allow tax affecting in divorce valuations
    • Relationship to personal balance sheet
  • Business valuation standards – Do the Family Courts care
    • Use and support of calculations and calculation reports
    • Bolster the credibility of your analysis and report
    • How attorneys are using them to discredit valuation analysts
  • Divorce valuations in the current economic downturn
    • Adjustments

Included in this downloadable package are:

  • Audio/Video file
  • Webinar transcript
  • Original Webinar handouts

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 Please note that CPE is only available for live webinar broadcasts.

Additional information

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