Lance Wallach Business Valuations
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Serving the USA
Nationwide Valuations
Call 516-938-5007
wallachinc@gmail.com
Nationwide Valuations
Call 516-938-5007
wallachinc@gmail.com
Wednesday, March 12th, 2014
By Lance Wallach, CLU, CHFC
Insurance agents are taking advantage of older people. Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots, by Sid Kess; Author/Moderator: Lance Wallach, CLU, CHFC – Excerpts have been taken from this book about: Senior abuses.
The following example is unfortunately not an isolated incident of an abusive sales practice. If accountants were consulted more often by their clients, maybe the following would never happen.
The following example is unfortunately not an isolated incident of an abusive sales practice. If accountants were consulted more often by their clients, maybe the following would never happen.
Senior citizen clients thought they had every reason to trust Mr. Sell BigPolicy as a financial counselor. The insurance agent had obtained a designation recognizing him as WE DO NOT WANT TO MENTION THE NAME Senior Advisor. He obtained this designation in 2002, a credential he made sure to advertise on fliers sent to retirees.
He did not mention how easy it had been to get that title.
He had paid $1,095 for a correspondence course, then took a multiple-choice exam with questions like, “Marketing can best be described as:” (The answer: “The process or technique of promoting the sale or distribution of a product or service.”) Like more than 18,700 other applicants since 1997, he passed.
Insurance companies, eager for sales representatives, embraced Mr. Sell Bigpolicy, as they have thousands of other newly credentialed advisors.
The following year, multiple insurers paid him commissions totaling $720,000 as his business with retirees soared.
But many of those sales came from steering older Americans into unwise investments, regulators contend in a lawsuit.
Mr. Sell Bigpolicy denies all wrongdoing, but one of his clients – a 73-year-old widow caring for a son with Down syndrome – said he tricked her into buying complicated insurance contracts that left her unable to pay dental and home repair bills.
“His office was filled with things saying he was certified to help seniors,” said that client. “The only one he really helped was himself.”
Taking care of the finances of older Americans is a huge and potentially lucrative field, and the market is growing. Attracted by this market, many financial planners have shifted their focus to it – and bring widely varying attitudes and professional training to the consultation table. Training and certification in financial gerontology is now being offered by at least four groups.
The Securities and Exchange Commission does not regulate these groups – or any other groups that provide financial planning certification, for that matter. “The S.E.C. does not endorse any professional designation,” said Susan Wyderko, director of the office of investor education of the S.E.C.
The absence of government supervision is a problem, said Stephen Brobeck, executive director of the Consumer Federation of America. “There’s an opportunity for fraud,” he said, adding that older people need to be very careful about whom they trust for advice.
Regardless of any planner’s credentials, the S.E.C. and consumer organizations say the best approach is “buyers beware.”
Investors can learn how to check the background of a financial planner, including any disciplinary actions, at the S.E.C.’s website, www.sec.gov. Such background checks, along with a discussion about an advisor’s approach to investing, are well advised before signing up with a planner.
“We see too many investors who might have avoided trouble,” Ms. Wyderko of the S.E.C. said, “had they asked basic questions right from the start.”
Mr. Sell Bigpolicy is one of tens of thousands of financial advisers working hand-in-hand with insurance companies to market themselves to older Americans using impressive sounding credentials.
Many of these titles can be earned in just a few days from businesses concerned only with the bottom line and sound similar to established credentials that require years of study, difficult tests and extensive background checks.
Many graduates of these short programs say they only want to help older Americans. But they are frequently dispensing financial counsel that they are not qualified to offer, advocates for the elderly say. And thousands of them are paid by some of the country’s largest insurance companies to sell elderly clients complicated investments that some economists say most retirees should never own.
More than two dozen such programs now exist, and have enrolled more than 39,000 people over the last decade.
But some of the existing programs, which are often linked to insurance companies, have taught agents to use abusive sales techniques, regulators say.
Some insurers have been listed as sponsors at seminars with names like the Million Dollar Academy, where thousands of sales representatives were advised to scare retirees by saying, “I am all that stands between you and potential catastrophic loss.” Other seminars instructed agents to “drive a wedge” between retirees and their established advisors.
“The insurers are happy to turn a blind eye to what salesmen are doing, as long as they make a sale,” said Minnesota’s attorney general, Lori Swanson, who is suing several companies, contending that their products are at best inappropriate, and possibly worse.
Insurance companies say they investigate the backgrounds of all agents, screen all sales to consumers to make sure they are appropriate, and have terminated representatives using improper sales methods. Those companies said they were not aware of abusive methods taught at any seminar they endorsed.
Some insurance companies say that they do not tolerate misrepresentation.
Another insurance company, in a statement, said “Any evidence of sales agent misconduct, without exception, results in immediate termination.”
Nonetheless, complaints over sales of insurance products have soared. In particular, grievances have stemmed from annuity sales. Obviously, occasionally a buyer of a product buys it without a full understanding of the product. If the product does not perform as expected, possibly because the stock market went down, the buyer may have a selective memory failure. The buyer can then complain to the insurance company, among other places. If the salesperson sold in good faith, and the product was appropriate, sometimes the buyer may still have recourse. Is this fair?
Over one third of all cases of financial exploitation of the elderly involve annuities, according to the North American Securities Administrators Association, a regulatory group [EM1]. Hundreds of lawsuits have been filed against insurers over annuity sales to the elderly. A judge in Minnesota ruled in 2007 that just one class action suit against a large insurance company could encompass as many as 400,000 plaintiffs. Do all of the plaintiffs deserve to be compensated? Who ends up with much of the money if the lawsuit is won? If you do not know the answer to the last question, ask yourself if it is a coincidence that huge class action litigation attracts prestigious large law firms like a picnic does flies.
In interviews, sales agents who have been accused of wrongdoing invariably say that they followed the guidance of insurance companies.
But consider, for example, that the vast majority of annuity sales do not offer immediate payouts. Instead, they require buyers to wait as long as 10 years to begin receiving benefits. Such contracts, known as deferred annuities, made up 97% of all annuity sales last year.
Deferred annuities, however, offer sales agents the richest commissions, which is one reason so many of them are sold every year, regulators say. Selling a $100,000 deferred annuity, for example, typically earns a sales representative $9,000, though buyers are sometimes prohibited from touching much of their money for 10 years without incurring penalties. No-load annuities, may feature little or no commission, and may not have penalties. Annuities with shorter tie ups carry much smaller commissions.
In summation, if it is true that sales agents who push large deferred annuities with long tie up periods are only following company guidance, that may be as negative a commentary on the companies as on the agents.
“An annuity that pays a fixed immediate income offers seniors a lot of security,” said Jean Setzfand, director of financial security with AARP. “But a deferred annuity is almost always a bad idea for a retiree.”
Those concerns, however, have not stopped many insurance agents from aggressively selling deferred annuities.
Some of those agents have been trained by organizations that require only a few days of classroom instruction.
For instance, the 1,200 people who have enrolled in a different senior adviser program spent only four days in a classroom, according to a spokesman.
The organization which gave Mr. Sell Bigpolicy his credentials is a for-profit company that has trained 24,000 enrollees since it was started in 1997.
The company that gave Mr. Sell Bigpolicy his designation has a course that lasts three and a half days, according to recent participants, and includes uplifting lectures, overviews on the sociology of aging and exercises including peering through vision-blurring lenses to get a sense of how some clients’ eyesight can falter.
Regulatory authorities tend to be ultra critical of these programs.
“There are limitless phrases being coined to convey an expertise in senior finances,” said Massachusetts securities regulator William F. Galvin. “Most of them seem designed to trick seniors into listening to swindlers.”
Most insurance salespeople are honorable and are not swindlers. As in most lines of work, however, not everyone is honorable and does the correct thing.
A representative for the organization said the program’s courses and questions were written and evaluated by experts. In a statement, the company said its training was intended to supplement, not substitute for, professional credentials and education. The organization began asking titleholders in March to disclose to potential clients that designation alone does not imply expertise in financial, health or social matters.
Despite that disclaimer, the company has trained thousands of insurance agents and other financial advisors. And about 100 companies, many of them insurers, endorse the designation, said a spokesman for the group.
Soon after Mr. Sell Bigpolicy received his designation, Mr. Sell Bigpolicy started displaying it in ads and on letters inviting retirees to seminars over free chicken lunches, according to Massachusetts regulators.
At those meetings, Mr. Sell Bigpolicy told retirees that they were perilously close to financial calamity, according to Massachusetts regulators and attendees. He warned them that the stock market’s ability to offset inflation was “a big lie,” according to documents collected by those regulators. Banks contained “weapons of mass destruction,” read one handout.
But annuities, Mr. Sell Bigpolicy noted, offered guaranteed returns, attendees said. At the time, he was authorized to sell annuities offered by more than two dozen insurance companies, state records show.
Mr. Sell Bigpolicy’s script, Massachusetts regulators say, used materials from another training company that had more than a dozen insurers as “partners” or “carriers” on the company’s Web site.
There are a few dozen companies, like the training company in question, that teach sales agents how to find retirees willing to buy annuities.
Some insurance companies say they endorse only training programs that are committed to ethical sales tactics and that their support is often limited to providing speakers or marketing materials. But they acknowledge that they cannot always police how agents present themselves.
Dozens of lawsuits against insurers contend that those companies failed to adequately supervise sales agents who sold inappropriate annuities to aging clients and then did not act when buyers complained.
Some insurers, in court filings and interviews, say they spend millions of dollars supervising sales agents and investigating consumer complaints.
Some insurance companies, and some state regulators, have changed the rules governing how annuity sales agents can behave.
This year, Massachusetts prohibited most financial advisers from using some titles unless they were recognized by an accreditation organization or the state. In 2007, two of the largest insurers told sales agents they could not use the designation of WE DO NOT WANT TO MENTION THE NAME senior adviser.
But in most other states and at most insurance companies, sales representatives can use any title they choose.
For his part, Mr. Sell Big Policy, while he awaits the outcome of his case, is still approved to sell annuities by more than two dozen insurers, according to state records. This is not an isolated example, which does not mean that an accountant should think that all insurance salespeople behave like this sales person. This example, in differing versions, does happen. If the customer consulted his or her accountant, which admittedly most do not, the above example, or something like it, may not happen.
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i), 419, Section79, FBAR and captive insurance plans. He speaks at more than ten conventions annually, writes for more than 50 publications, is quoted regularly in the press and has been featured on television and radio financial talk shows including NBC, National Public Radio’s “All Things Considered” and others. Lance has written numerous books including “Protecting Clients from Fraud, Incompetence and Scams,” published by John Wiley and Sons, Bisk Education’s “CPA’s Guide to Life Insurance and Federal Estate and Gift Taxation,” as well as the AICPA best-selling books, including “Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots.” He does expert witness testimony and has never lost a case. Contact him at 516.938.5007, wallachinc@gmail.com or visit www.taxadvisorexpert.com.
The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
Monday, February 24th, 2014
America’s Best-selling CPE Programs
Business Valuations: What Businesses Can Gain From Them
A business valuation measures the worth of a business on the open market. It analyzes the company’s management, capital structure, future earnings potential and market value of its assets – and can be critical to running a successful enterprise.
Business valuations are often performed during a sale, merger or divorce proceeding. But every business can benefit from an annual valuation. After all, a business is typically the owner’s largest asset – and understanding its true worth can lead to opportunities for greater success.
The Information a Valuation Will Return
Business valuations are full of information essential to running a successful business, including:
· Details about the reason for the valuation.
· A description of the company and its market position.
· An analysis of risk factors specific to the business and industry.
· An assessment of economic conditions and industry trends.
· Detailed past and projected financial statements.
· A review of valuation methods, and justification for those selected.
· An estimate of value, typically based on a weighted average of the various valuation methods.
Using This Information to Your Advantage
A business valuation allows owners to make informed decisions when working on long-term or expansion planning, retirement planning or estate planning. Without one, you could be making plans based on an underestimated value, and foregoing tax-saving strategies. On the other hand, an inflated view of your business could result in wasting time and money on a business that’s not worth as much as you thought.
The economy affects the value of every business, based on prevailing market forces. Armed with up-to-date economic information, a business owner can make solid decisions, such as putting off buying equipment or hiring employees. Or, he or she may decide it’s time to borrow money to fund an expansion, or tighten up on expenses to save cash.
The valuation’s thorough review of industry trends can be used to gauge where a business stands, compared to its competition. For example, if your business is not performing to the same level as comparable companies, you may be compelled to find out why. Without this information, it could be years before you discover you’re behind your competitors – and too late to catch up.
Do You Really Know What Your Business is Worth?
Many business owners rely on internal financial statements to determine the company’s value. But a professional business appraiser will take a thorough approach – so you have a highly accurate picture of your business’s worth.
The appraiser will gather a great deal of information about the business, the industry in which it operates, current and projected economic conditions and other factors that affect value. In most situations, the various accepted valuation methods will yield different results. For example, the income approach bases value on expected income generation, while the asset approach bases value on business’s assets. The market approach bases value on past sales of shares in the business or a similar one. Each approach will supply a range of reasonable values, which are supported by valid means of justification. In any case, you’ll have a clear and accurate snapshot of how well your company is doing – or not. Without a professional business valuation, you could be at a serious disadvantage.
An Annual Valuation Can Keep You On Track for Growth
Business valuations should be included in every business owner’s plan
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The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
Friday, February 21st, 2014
Chapter One
Meltdown
Muhammad Ali: “Superman don’t need no seat belt.”
Airline Stewardess: “Superman don’t need no plane, neither.”
The U.S. financial system meltdown has grimly scythed decades of accumulated business profit, investment and personal wealth. As we have seen, investors undervalued their own rationality and overvalued chaotic wealth management schemes masquerading as complex asset management in a global economy. Investors dumped business earnings, pension assets and personal funds into investment portfolios without due diligence as to the logic and structural soundness of those investments and their strategic economic orientation.
Counter-intuitively, many wealthy investors and business owners took leaps of faith with hard-won assets into complex investment schemes they didn’t understand because returns were bountiful. The hard work processes by which investors grew their business or their wealth didn’t seem to apply to strategically marketed programs devised by Wall Street wizards. “The wizards must be smarter and more inventive” was the mantra. It was an era where not paying attention yielded robust earnings.
THE PARTY’S OVER
The charlatans have now been revealed and returning to earth awash in lost assets has been a hard lesson learned for many business and personal investors. Fear of any kind of strategy beyond the most basic principles of accounting math has turned financial markets into rigid, ossified institutions. Credit is tight; doubt is rampant. But fear need not overtake common sense. If one is strategically poised to act, there are methods to reap opportunities even within the constant inhalation of a bad news economy.
There are ways to maximize wealth assets through sound tax strategies aimed at reducing exposure to IRS audits, while freeing liquidity for further investment income growth. Part of the picture is understanding what the U.S. government has and has not done in the financial sector.
The U.S. Government failed to regulate its own legislative loosening of the credit and investment markets. The government allowed financial businesses that previously dealt in single issue items, such as credit allocation (banks), insurance (insurance companies) and tax protection (accounting firms) to become full service investment/banking/insurance hundred-headed hydras. With the ability to manipulate different asset classes, many of these businesses grew astronomically by forging new markets out of fringe niches and clients they previously would not have pursued.
Much of the growth was built on Ponzi-type schemes of trading one asset class for another, rebundling (while claiming it was an asset protection maneuver), and charging transaction and management fees for transferring and translating assets into different holding tanks. Ethical portfolio diversity became a joke.
Forensic auditors will spend years trying to unravel the origination of lost portfolios and their mutation into worthless products that propped up marketing schemes.
Lance Wallach
68 Keswick Lane
Plainview, NY 11803
Ph.: (516)938-5007
Fax: (516)938-6330 www.vebaplan.com
National Society of Accountants Speaker of The Year
68 Keswick Lane
Plainview, NY 11803
Ph.: (516)938-5007
Fax: (516)938-6330 www.vebaplan.com
National Society of Accountants Speaker of The Year
The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
Monday, February 17th, 2014
America’s Best-selling CPE Programs
New BISK CPEasy™ CPE Self-Study Course
Author/Moderator: Lance Wallach, CLU, CHFC, CIMC
Excerpt:
By Grant Webb. To become a CPA who performs business valuations means you’ve truly mastered your trade. Bisk trains accountants to become CPAs to broaden the scope of one’s possible accounting careers.
Whether you are looking to court investors for expansion, selling, or just want to accurately gauge the value of your business, a formal business valuation is an important tool. Many business owners are so focused on building the company, staying ahead of competition, and keeping aware of market trends that they seldom stop to take a good look at what they have accomplished. A business valuation offers the opportunity to put a value on the entire business and may be used as a lens through which to focus future efforts.
The Process of Business Valuation
In general, a CPA will provide a list of documents you will need to assemble in order for the process to begin. This necessary as there are many different methods for business valuations. You will generally fill out a questionnaire and meet with the CPA who will then compile all the information into a formal business valuation. Sometimes this is completed entirely online. Follow-up may be needed. For a small company the process can usually be completed within a month or less. The main documents you will need regardless of valuation method are your tax records for the past several years, any other records regarding cash flow, and any recent investments/improvements that have been made.
If there are multiple stakeholders in the company’s assets you will need to provide that related supporting documentation, as well. The valuation takes into account current economic conditions and can also provide the value for each stakeholder’s part of the company based on the documentation you provide.
While many business owners conduct a valuation for personal knowledge, others need it when one partner wants out, or if a third party has made an offer to buy it, or if a divorce is looming. Having a highly regarded and experienced CPA do the job is important since the findings may have legal implications, especially if the dissolution of a partnership is part of the motivation for the valuation.
The Benefits of a Business Valuation
Knowing what your business is worth based on the current economic conditions is important as a tool to clarify future actions. You may decide now is not the time to sell, or you may look to sell the business in an area where similar businesses are needed and you may secure a better deal.
If a partner wants out (or in), a business valuation will clarify how much money each person’s part of the company is worth. This may help to mitigate conflict when someone wants out of the business and is asking for more than what the other owners think is fair. Looking at a business valuation in the context of a whole business strategy plan, the valuation process may serve to clarify fertile areas of expansion. The business valuation process can be used as a time to re-group and strategize for future success. Some business owners choose to use the valuation process in conjunction with meeting formally with strategy consultants.
In markets enjoying rapid growth, having a recent valuation complete may mean that if an eager buyer comes knocking you will have a solid ball park estimate of the range of offers you will seriously consider. A business valuation may also be helpful if you are looking for ways to streamline your company and sell off part of it or possibly buy out another owner. Often the process begins for one reason or other, but then evolves into a more comprehensive look at overall short-range and long-range planning. Embraced fully, the business valuation process can be a powerful part of large plan to build a more focused company goal set.
Other Considerations
For business owners seeking to obtain a comprehensive look at what their business might be able to sell for in today’s economy, a business valuation completed by a certified CPA may be a strong tool for clarifying perspective and direction. In the case of mitigating internal squabbling among stakeholders, or in the case of a pending partnership split, the process is invaluable. While some business owners come to a business valuation as part of pending litigation, such as a divorce, others choose it voluntarily. As such, the business valuation becomes a strategic tool for leveraging more power in future company investment, expansion, and development. While many methods exist for assessing a business valuation, the assistance of an experience and full certified CPA may be your best ally in securing the most accurate, dependable, and respected business valuation.
ABOUT THE AUTHOR: Lance Wallach, National Society of Accountants Speaker of the Year.
Lance has written numerous books including Protecting Clients from Fraud,
Incompetence and Scams published by John Wiley and Sons, Bisk Education’s CPA’s
Guide to Life Insurance and Federal Estate and Gift Taxation, as well as AICPA best-selling
books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Small
Business Hot Spots. He does expert witness testimony and has never lost a case. Contact
him at 516.938.5007, wallachinc@gmail.com or visit www.taxaudit419.com or www.taxlibrary.
us.
Copyright Lance Wallach, CLU, CHFC
More information about Lance Wallach, CLU, CHFC
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
Wednesday, February 12th, 2014
When it comes time to sell your business, you will need to come to the negotiating table armed with facts and support to back up your position on your company’s valuation. Focus your energies on the following areas when considering an appropriate working capital target:
What is normal for the industry?
What is working capital as a percentage of sales?
What special terms cause the company’s working capital to vary from normal levels?
How significantly does inventory vary on a month-to-month basis?
Also be wary of the following common due diligence working capital findings that could indicate a requirement for higher working capital:
Lack of sufficient receivable or inventory reserves
Cut-off issues on an interim basis
Individual accounts that should be excluded, such as accrued interest
Missing accruals such as vacations, payroll, bonuses, warranty, sales allowances, etc.
What is normal for the industry?
What is working capital as a percentage of sales?
What special terms cause the company’s working capital to vary from normal levels?
How significantly does inventory vary on a month-to-month basis?
Also be wary of the following common due diligence working capital findings that could indicate a requirement for higher working capital:
Lack of sufficient receivable or inventory reserves
Cut-off issues on an interim basis
Individual accounts that should be excluded, such as accrued interest
Missing accruals such as vacations, payroll, bonuses, warranty, sales allowances, etc.
The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
Monday, February 10th, 2014
The ABV is the business valuation credential granted by the American Institute of Certified Public Accountants (AICPA). To be eligible to apply for the ABV credential, a candidate must:
Be a member in good standing of the AICPA
Hold a valid and unrevoked CPA certificate or license issued by a legally constituted state authority
Pass a comprehensive Business Valuation Examination
Provide evidence of ten business valuation engagements that demonstrate substantial experience and competence
Provide evidence of 75 hours of life long learning related to the business valuation body of knowledge
The ABV designation certifies that you are working with an accredited valuation professional—a CPA who brings added value to a valuation engagement. As a CPA/ABV, we combine a sophisticated understanding of accounting, taxation, financial statement analysis and business operations in many different industries with proven competence in valuation. Building on our core competencies, the ABV gives us an advantage in meeting your valuation needs.
Be a member in good standing of the AICPA
Hold a valid and unrevoked CPA certificate or license issued by a legally constituted state authority
Pass a comprehensive Business Valuation Examination
Provide evidence of ten business valuation engagements that demonstrate substantial experience and competence
Provide evidence of 75 hours of life long learning related to the business valuation body of knowledge
The ABV designation certifies that you are working with an accredited valuation professional—a CPA who brings added value to a valuation engagement. As a CPA/ABV, we combine a sophisticated understanding of accounting, taxation, financial statement analysis and business operations in many different industries with proven competence in valuation. Building on our core competencies, the ABV gives us an advantage in meeting your valuation needs.
Lance Wallach
68 Keswick Lane
Plainview, NY 11803
Ph.: (516)938-5007
Fax: (516)938-6330 www.vebaplan.com
68 Keswick Lane
Plainview, NY 11803
Ph.: (516)938-5007
Fax: (516)938-6330 www.vebaplan.com
National Society of Accountants Speaker of The Year
The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
Friday, February 7th, 2014
The ABV is the business valuation credential granted by the American Institute of Certified Public Accountants (AICPA). To be eligible to apply for the ABV credential, a candidate must:
Be a member in good standing of the AICPA
Hold a valid and unrevoked CPA certificate or license issued by a legally constituted state authority
Pass a comprehensive Business Valuation Examination
Provide evidence of ten business valuation engagements that demonstrate substantial experience and competence
Provide evidence of 75 hours of life long learning related to the business valuation body of knowledge
The ABV designation certifies that you are working with an accredited valuation professional—a CPA who brings added value to a valuation engagement. As a CPA/ABV, we combine a sophisticated understanding of accounting, taxation, financial statement analysis and business operations in many different industries with proven competence in valuation. Building on our core competencies, the ABV gives us an advantage in meeting your valuation needs.
Hold a valid and unrevoked CPA certificate or license issued by a legally constituted state authority
Pass a comprehensive Business Valuation Examination
Provide evidence of ten business valuation engagements that demonstrate substantial experience and competence
Provide evidence of 75 hours of life long learning related to the business valuation body of knowledge
The ABV designation certifies that you are working with an accredited valuation professional—a CPA who brings added value to a valuation engagement. As a CPA/ABV, we combine a sophisticated understanding of accounting, taxation, financial statement analysis and business operations in many different industries with proven competence in valuation. Building on our core competencies, the ABV gives us an advantage in meeting your valuation needs.
Wednesday, February 5th, 2014
What is your business worth?
Whether you are thinking of buying a new business, selling the company you’ve built over many generations or in the midst of a difficult divorce, the amount attached to the value of your business is important. We can provide useful and objective analysis to assist you in the valuation of any business in which you have an interest. AKT valuation services assist CPAs and other financial advisors in moving business owners forward to implement succession and estate plans.
The professionals of AKT have been involved in many valuations in widely diverse industries including our large niche in the healthcare industry, retail and wholesale operations, agriculture, building materials, computers and information technology services, construction, private post-secondary schools, manufacturing, processing, professional services, real estate, telecommunications, transportation including automobile dealerships, and utilities.
Our professionals in Business Valuation Services are skilled in providing expert appraisals for:
Our professionals in Business Valuation Services are skilled in providing expert appraisals for:
Acquiring and divesting a business
Business succession and buy-sell agreements
Estate plans, gifting and estate tax filings
S Corp. conversions
Purchase price allocations
Family Limited Partnerships and LLC’s
M&A strategies
Employee benefit plans
Financing
Strategic corporate planning
Business succession and buy-sell agreements
Estate plans, gifting and estate tax filings
S Corp. conversions
Purchase price allocations
Family Limited Partnerships and LLC’s
M&A strategies
Employee benefit plans
Financing
Strategic corporate planning
Tuesday, January 28th, 2014
There are three categories of valuation services to serve your business valuation needs. These include a formal valuation opinion, a preliminary indication of value and valuation consulting services. The nature of these three levels of service is described below.
Formal Valuation Opinion
Formal Valuation Opinion
To provide a conclusion of fair market value, we are required by our certifying organizations to perform a detailed analysis and study of the company, its industry and the markets in which it operates.
Both internal and external factors that influence the value of the company will be reviewed, analyzed and interpreted. Internal factors include, but are not limited to the company’s financial position, results of operations, and the size and marketability of the interest being valued. External factors include, but are not limited to the status of the industry and the position of the company relative to the industry.
To enable us to issue a formal valuation opinion we will analyze financial statements, financial information and other data obtained from management; visit the company; interview management; research the company’s industry, customers and competitors; search for guideline companies; and perform other procedures necessary and appropriate to render an opinion regarding the fair market value of the company. We will also prepare a written valuation report based on our analysis.
Preliminary Indication of Value
Both internal and external factors that influence the value of the company will be reviewed, analyzed and interpreted. Internal factors include, but are not limited to the company’s financial position, results of operations, and the size and marketability of the interest being valued. External factors include, but are not limited to the status of the industry and the position of the company relative to the industry.
To enable us to issue a formal valuation opinion we will analyze financial statements, financial information and other data obtained from management; visit the company; interview management; research the company’s industry, customers and competitors; search for guideline companies; and perform other procedures necessary and appropriate to render an opinion regarding the fair market value of the company. We will also prepare a written valuation report based on our analysis.
Preliminary Indication of Value
This type of engagement is generally substantially less exhaustive than the procedures necessary to issue a formal valuation opinion.
The extent of procedures to be performed will depend on your requirements. In addition, under your direction, a written report may or may not be prepared.
Our fee to prepare a preliminary indication of value is dependent on the extent of procedures to be performed and whether a report is to be prepared. For informational purposes, this type of consulting engagement generally consumes 40% to 60% of the fees for a formal valuation opinion.
The extent of procedures to be performed will depend on your requirements. In addition, under your direction, a written report may or may not be prepared.
Our fee to prepare a preliminary indication of value is dependent on the extent of procedures to be performed and whether a report is to be prepared. For informational purposes, this type of consulting engagement generally consumes 40% to 60% of the fees for a formal valuation opinion.
Thursday, December 19th, 2013
Divorce
In a divorce situation the business is often the most valuable asset in the marital estate. Whether you are the “in” spouse involved in the business or the “out” spouse, a valuation is an integral part of the divorce proceedings to ensure an equitable division of assets.
Estate and Succession Planning
Knowledge of the value of a business is crucial to effective estate/succession planning. Proper planning ensures the future distribution of the business assets has minimal tax consequences and prevents a liquidation of the company. Additionally, a supportable valuation is essential in establishing value for estate or gift tax purposes.
Buy/Sell Agreements
Proper planning and proper installation of a buy/sell agreement is essential for the future well-being of your business and your family. Our valuation team can work with you and your attorney to develop appropriate values and/or provisions for use in your buy/sell agreement.
Shareholder/Partner Disputes
In contentious situations, it can be beneficial to have a neutral third party help you determine the value of the business. A valuation team with solid valuation expertise can help assure you that the dispute is being settled fairly.
Litigation Support
A properly prepared business valuation can prove extremely helpful in legal disputes including the following situations:
Divorce proceedings
Shareholder/partner disputes
Economic damages
Liquidations
ESOP Transactions
Shareholder/partner disputes
Economic damages
Liquidations
ESOP Transactions
Employee Stock Ownership Plans (ESOP) continue to be an alternative to selling a company to an outside party. An added benefit is the tax advantage to the current owners. However, if a company’s stock is not publicly traded the Department of Labor requires annual valuations to support the stock tran
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