Archive 2012-51: Normalization Adjustments




Normalization vs. Abnormalization Adjustments in Valuation – Why When What How and How Not **Webinar 51 Broadcast Date: June 26, 2012**

presented by

  • Jim Hitchner, CPA/ABV/CFF, ASA with Jim Alerding, CPA/ABV, ASA, CVA

    One of the most important and sensitive value drivers in any valuation is normalization adjustments to income in both the income and market approaches. There are also normalization adjustments made to various assets in the net asset approach. This session examines the issues surrounding normalization adjustments including:

    • Why should normalization adjustments be made?
    • What normalizations adjustments are appropriate?
    • How are such adjustments determined and supported?
    • How do you avoid and identify “abnormalization” adjustments?

    • Webinar Outline:

      • Define and discuss the major purposes for using normalization adjustments
      • Define and discuss the use of normalization adjustments in the income, market and net asset approaches
      • How to support legitimate normalization adjustments
      • How to attack abnormalization adjustments
      • Discuss the types and sources of information for normalization adjustments including:

        o Control vs. minority

        o Ownership characteristics

        o GAAP departures, extraordinary, nonrecurring and unusual items

        o Nonoperating assets and liabilities

        o Contingencies

        o Depreciation and amortization

        o Taxes

        o Synergies

        o Standard and premise of value

        o Unrecorded assets and liabilities

        o Debt

        o Capital structure

        o Distributions

        o Discounts for lack of marketability and control

        o Control premiums

        o Discount, capitalization and growth rates

      Learning Objectives:

      • The Participant will learn the use and implementation of normalization adjustments when using any of the three approaches to value
      • The Participant will learn to identify the types of normalization adjustments and sources of information for them
      • The Participant will learn when to use or when not to use control normalization adjustments
      • The Participant will learn the categories of normalization adjustments and their uses and purposes


    Included in this downloadable archived webinar package:

    • 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

Weight 0.00 oz