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.

In the 8th post in my Statutory Fair Value and Business Valuation Series, we focus on the case Verghetta v. Lawlor. We consider five valuation issues this case raises: reasonableness of valuation conclusions, reasonableness of normalization adjustments, reasonableness of projections, whether the earnings of tax pass-through entities should be tax-effected, and appropriateness of a marketability discount.

Considering the formal proceeding of an expert deposition, I created a list of thoughts on giving an effective deposition from my own experience. I hope you find it helpful.

An expert deposition is a formal proceeding. I created this list of deposition preparation items from my own experience in having my deposition taken and in attending a number of depositions of other experts or parties to various matters. I hope you find it helpful.

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.

The discounted cash flow model as summarized by the Gordon Model provides an ideal basis for discussing what we call an integrated theory of business valuation. In this post, we begin with a bit of introduction for perspective.

We continue our discussion of statutory fair value with an outline of the discounted cash flow (DCF) model (or method). The DCF valuation method is a core method within the Income Approach to Value (with the other two approaches being the Asset Approach and the Market Approach). One objective of this series of posts on statutory fair value is to outline sufficient valuation and finance theory so we can begin to examine cases, i.e., judicial interpretations of what fair value means. With the proper background, we will be able to understand and to interpret what the courts have said in the context of valuation theory.

If fair value in a jurisdiction is the proportionate interest in a going concern, it could either be at the strategic control level or the financial control level. However, because of the prohibition of the use of minority interest discounts, appraisers and courts need to develop a common vocabulary that will enable both to develop realistic indications of statutory fair value.

It is always good to have another birthday. But this year, billions of people all around the world are helping me celebrate. My birthday, February 8th, coincides with the Chinese New Year 2016. It is the Year of the Monkey.