Recently, an attorney and financial planner called me to talk about a client who was discussing his ownership, management succession plans, and the life insurance associated with his “planning.” During our two-hour discussion, I learned about the client’s situation and was able to offer potential modifications to his current transition plan.
Last week, I attended the joint AICPA/AAML and spoke on Friday. I spoke on the topic of buy-sell agreements and related the subject matter to divorce, as divorce is a frequent trigger event in buy-sell agreements. I also participated in a panel labeled the Battle of New Orleans 2016. This post recaps some speaking highlights of my time in New Orleans.
When I began testifying, I looked for guidance, which I found in the booklet, “Testifying with Impact,” by a former professor and speech coach. Foremost, I learned the objective of testimony is not to read words or testify without notes, but to communicate thoughts, ideas, and knowledge. In this post, I reflect on the other simple but powerful lessons I learned from this booklet.
We continue with our discussion of getting command of the numbers by discussing income statement adjustments. Normalizing adjustments are made in valuations to separate unusual or non-recurring or management discretionary items of income or expense on the income statement. The objective of normalizing adjustments is to develop historical, adjusted income statements and percentage income statements that can be used in the valuation process.
The following ten comments should provide a good overview of the concept of income statement (normalizing) adjustments for business appraisers and for attorneys.
We continue the series begun in the previous post based on my long-ago staff memo regarding “The ABZs of Solid Valuation Conclusions and Reports.”
The most frequent and often embarrassing errors that occur in valuation reports are the result of obvious issues or elementary mistakes. This happens when appraisers fail to “get command of the numbers.” Based on years of experience, I’ve listed 10 things a business appraiser must do to get command of the numbers.
While I am speaking from the viewpoint of a business appraiser in this series, the information provided will be helpful to attorneys who deal in matters pertaining to valuation.
In this walk down memory lane, I share excerpts from a piece I originally wrote for business appraisers in 1989 and updated in the mid-1990s entitled “The ABZs of Solid Valuation Conclusions and Reports.” If you were in business in the 1990s, this post will bring back memories. If you were not, you might enjoy an inside look at the climate of the time. Either way, it’s a fun journey.
The first time I testified in court was in 1981, the year before I started Mercer Capital. I had participated in the preparation of a fairness opinion in a going private transaction while at Morgan Keegan, my employer at the time. A shareholder dissented, and the Chancery Court in Memphis was charged to determine the (statutory) fair value of the company’s shares in accordance with Tennessee statutory law and judicial interpretation. There has to be a first time for everything.