Understanding the Implications of Cecil v. Commissioner
In Cecil v. Commissioner, the U.S. Tax Court was faced with a dispute involving the valuation of a noncontrolling interest in a privately held S corporation. The ruling provides analysts with guidance about valuing a noncontrolling interest in S corporation stock.
How to Properly Use Asset Transactions in the Guideline Merged and Acquired Company Method
In utilizing the guideline merged and acquired company method to estimate a value for a closely held company, particularly a smaller business, the valuation analyst typically will find more transactions of private guideline companies than publicly traded companies. Most transactions of small, private companies are structured as asset sales. Although both asset sales and stock sales can be used to develop a value indication for a subject company, it is inappropriate to combine the transactions without making proper adjustments. Assets sales and stock sales are different transaction structures, and the transaction price often reflects the transfer of different assets and liabilities, which will have a direct effect on the pricing multiples used to value the subject company.
Getting the Most out of Every Engagement
Marc Bello has joined Willamette Management Associates in the midst of a distinguished 20-year career in business valuation and forensic analysis. For Bello, success stems from many skills, but particularly important are education, personal development, and integrity. Understanding the financial landscape is crucial to business valuation and forensic analysis because it leads to proper questions that produce the necessary documents essential for a supportable result. Additionally, incorporating a wholistic approach that analyzes industry and nonfinancial data leads to a supportable valuation. Finally, clear communication creates understanding between an analyst and a client throughout an engagement.
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Winter 2023 Insights - Best Practices
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Autumn 2022 Insights - Thought Leadership in Wealth Transfer Valuation Issues
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