Understanding all of the elements that go into valuing your business can seem like an overwhelming task. But A Field Guide to Business Valuation has insights to make it less of a challenge. With this post, we focus on Chapter 6. Read more >>

One of the lessons learned from the COVID-19 crisis is that a coherent narrative is more important than ever in business valuation, says Dr. Aswath Damodaran, of New York University Stern School of Business, who gave the keynote address at the CBV Congress 2021. A valuation needs a marriage of narrative and numbers, Damodaran says. In a good valuation, the numbers are “bound together” by a coherent narrative, and storytelling is kept grounded with numbers. Too much emphasis on numbers can make valuations mere “plug-and-point exercises” that may be perceived to be sales pitches or a confirmation of preconceived values. Read more >>

Business valuations prepared for divorce purposes can be much more challenging than valuations can be for other purposes because the rules differ among jurisdictions. There are no clear valuation guidelines for divorce in most states. For example, there’s no specific definition of value in state statutes governing divorce. Also, divorce courts exercise a great deal of discretion—even if there is an abundance of judicial precedent (which can be confusing and contradictory). Read more >>

The Tax Cuts and Jobs Act includes special tax breaks for a number of industries, including the winery sector. This adds to the special differences experts need to consider when valuing these entities. Read more >>

In addition to revisions to existing material and examples, there’s new material on valuing stock options, preferred stock, debt, and startup ventures. Read more >>

The conference sessions were an excellent mix of theory and practice—ideas that you can use in your practice right away. Read more >>

The Delaware Supreme Court recently overturned a 2016 ruling by the Delaware Court of Chancery that arrived at fair value by weighting the results of three valuation techniques equally. The high court's Chief Justice Strine, who once headed the Chancery, found this approach was problematic and used the decision to provide valuation advice to his successor, Chancellor Bouchard, who had overseen the appraisal proceeding. Read more >>

Appraisers have to consider each of the valuation approaches, but the income approach is the only way to value a solar company, says a valuation expert in the industry. Read more >>