We have extensive experience in valuing a wide variety of businesses and industries and our services include:
1. Financial Reporting – Advanced Business Valuations provides a comprehensive set of valuation services to assist your company with financial reporting requirements. We have the capability to serve the full range of your fair value valuation needs, providing valuation opinions that satisfy the scrutiny of your auditors, the SEC, and other regulatory bodies. We understand the sensitivity of financial reporting timing needs and meet your deadline on time, every time
- Purchase Price Allocation- We provide independent valuation opinions on the fair value of intangible assets acquired in business combinations. Our professionals can provide services such as: Purchase Price Allocation and Acquisition Accounting Services, Annual Amortization Estimates, Assistance in Identification of Intangible Assets, Preliminary Intangible Asset Amortization Estimates, Impairment Testing and Financial Reporting Valuation Services. Our professionals have significant experience in valuations related to ASC 805 Business Combinations.
We estimate the Fair Value of the following Intangible Assets on a regular basis
In-process R & D
- Impairment Testing- We provide independent valuation services to help clients test and measure impairment of intangible assets including goodwill.
ASC 350 Intangibles and ASC 360 Property, Plant, and Equipment require periodic assessment of the fair value of long-lived and non-amortized assets. IAS 36 and IAS 38 provide guidelines for impairment tests of tangible and intangible assets under the international accounting standards.
With over 29 years of valuation experience, we can assist clients with impairment testing of intangible assets, including goodwill, in accordance with US and international accounting standards. We provide services such as: The 2-Step Goodwill Impairment Test required by ASC 350 and ASC 360, Reporting Unit Valuation Services, Assistance in the Identification of Reporting Units, Fair Value Estimates of Intangible Assets, Purchase Price Allocation and financial reporting Valuation Services.
- Stock Options Pricing- We provide independent valuation services to help clients estimate compensation expense under FASB ASC 718 Stock Compensation. Non-employees will be covered in FASB ASC 505-50 Equity-Based Payments to Non-Employees. This Statement requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award—the requisite service period (usually the vesting period).
2. Business Valuation
- Buy/Sell Agreements- A buy-sell agreement allows a partner or stockholder in a closely held business to acquire the interest of a partner or stockholder who withdraws from the business. The agreement may contain a designated price, or a formula to determine the price that the remaining owners of the entity will pay to acquire the interest. The price or the formula needs to be updated periodically. Payment terms and conditions of sale are also generally provided. Clients and their attorneys frequently rely on us to assist them in drafting the proper wording to insure that valuations are performed in accordance with the clients’ wishes.
- The appropriate standard of value to determine value in accordance with the wishes of the parties to the agreement
- The procedures to be employed to ascertain the value; e.g. a fixed formula or the process to obtain an actual valuation
- The appropriate valuation methods to be used by the business valuation analyst
- Closely Held Businesses and Corporate Securities- The value of a closely held business needs to be ascertained in many matters including divorce proceedings; shareholder and partner disputes; estate, gift or income tax litigation; contracts, acquisitions and divestitures; and estate planning. We provide objective independent business valuation services to clients looking to value their company on a controlling or minority interest basis as well as valuing various type of corporate securities (including common stock, preferred stock, warrants, options and debt).
- Estate and Gift Taxes- Creating and preserving wealth forms the basis of family and estate planning. Proper planning should provide sufficient assets to maintain your family’s lifestyle and assure distribution of assets to your heirs at minimal tax and administrative cost. To eliminate or minimize potential future problems with the Internal Revenue Service, it is extremely important to place an independent and objective value on non-cash interests.
We can assist in making sure that the agreement is worded clearly so that the valuation process is without ambiguity. This will often involve establishing at least the following:
3. Valuation Report Reviews – We can review expert reports previous issued and assist the company and its accountants and attorneys in determining if the report is in compliance with industry standards and evaluate the estimate of value.
4. Financial Consulting. When it comes to corporate planning, it is crucial for business owners to know how much their stock or assets are worth. These values, as well as any anticipated changes, will materially affect operations and tax strategies. Many important assets do not even appear on a business’ balance sheet and those that do appear are valued at historical costs rather than current worth. A valuation may be needed for any number of corporate planning scenarios such as:
- Mergers and Acquisitions. The buying and selling of a company is obviously a major decision. A valuation is an essential component in setting a fair market price, establishing negotiation parameters, structuring the transaction, and evaluating various tax implications to meet the needs of all parties.
- Public Offerings. Due diligence examinations, which include an objective third-party valuation, are extremely helpful in satisfying federal and state regulatory concerns regarding full and accurate disclosure and security pricing. An independent valuation also assists in establishing investor confidence and in providing a sound base for subsequent trading.
- Going Private. An independent determination of fair market value must generally be established for public entities wishing to acquire the shares of their minority stockholders.
- Leveraged Buyouts. An independent valuation is critical in establishing the terms and conditions of a leveraged buyout and in structuring the acquisition debt package.
- Purchase Price Allocations. In allocating the purchase price of a going concern to the various assets acquired, an independent valuation is essential in substantiating such allocations before the Internal Revenue Service and for complying with accounting standards for financial reporting. Advanced Business Valuations works closely with real estate, machinery and equipment, and other specialized appraisers to establish these values.
- Buy/Sell Agreements. A valuation will often assist business owners in avoiding future problems by establishing a standard of future value for stockholder/partner buyouts.
5. Litigation Consulting – Our services can help you develop and present precise, objective evidence that clearly shows the merits of a legal position.
Discovery Assistance During the pretrial phase, an objective valuation analysis can substantially increase effectiveness in pre-trial planning, depositions, or settlement negotiations. We can assist our clients in every phase of the dispute process. We assist you to develop and present concise, objective evidence that clearly shows the merits of a legal position. You are kept fully informed at all times and receive regular progress reports. Dispute resolution services which might occur in the earlier portion of the litigation process include:
- Defining issues- By identifying key accounting, financial, economic and industry issues, we provide the theory and outline proof. We also determine what records may be needed.
- Fact finding and documentation- We collect and review relevant information, provide studies and projections, and report on the strengths and weaknesses of evidence. We can also assist with product requests, interrogatories, claims and depositions.
- Response to discovery- While preparing additional or alternative information based on new assumptions or developments in the case, we can analyze and discuss the significance of information obtained by the opposition. Additionally, we generate or review trial exhibits.
- Analyzing the work of other experts- We can ascertain the reasonableness (or lack thereof) prior to filing litigation. Enhancing the understanding of the strengths and weaknesses of the opposing expert’s position(s) and when appropriate, pointing out errors or logical problems in the opposing expert’s work at the deposition stage.
- Damage Analysis- We can assist in the preparation of preliminary damages analysis, or developing initial damages theories, prior to the filing of damages litigation
- Preparing Questions for Deposition- We can assist in the preparation of questions to assist counsel in the deposition of expert and/or appropriate fact witnesses
- Trial Support- During trial, the testimony of a valuation expert can greatly strengthen a case. You want the evidence you present in court to be credible, coherent and consistent. Our professionals will work with you at all phases of the process.
- Pretrial – The oral or written reports we provide enable us to brief counsel and witnesses on financial and accounting matters, explaining documentation and the methodology used to create it. We can often suggest potential negotiating strategies.
- Trial – We serve as expert witnesses or prepare others to testify. We may draft testimony outlines for review and list possible cross-examination questions and responses. We are available to attend the trial to support you in the examination and cross-examination of witnesses as well as to evaluate the opponent’s trial exhibits.
- Post trial – You can look to us for relevant advice on settlements and financial information for use in briefs and appeals as part of our continuing litigation support services.
Our trial support consists of:
- Critique of opposing experts
- Cross-examination assistance
- Expert testimony
- Economic research
- Public securities, market, and industry research
- Our Services- We can serve as an expert witness and work closely with legal counsel in various litigation cases including:
- Marital Dissolutions- When either or both parties to a divorce have business interests, it is often necessary to establish the fair market value of such holdings in the process of determining an equitable division of assets. Expert testimony will often be required during the course of such proceedings. In addition to valuing businesses in connection with divorce proceedings, we can be of assistance in determining and valuing marital assets and liabilities, determining tax impacts of property division, alimony, child support, etc., and in preparing pre-trial statements.
- Shareholder and Partner Disputes- An independent valuation can greatly simplify shareholder and partner negotiations during dissolution proceedings. It is not unusual for shareholders/partners to have disputes that involve various financial and economic items. These can include everything from determining an amount that a departing shareholder/partner is owed for their interest pursuant to an agreement, to determining amounts that were misappropriated.
- Dissenting Shareholder Actions- Stockholder disputes can range from breakups of companies resulting from disagreements between stockholders to stockholder dissent relating to mergers, dissolutions, and similar matters. Since many states allow a corporation to merge, dissolve, or restructure without unanimous stockholder consent, many disputes have arisen over the years because minority stockholders have felt that the action of the majority had a negative impact on them. Dissenting stockholders have filed lawsuits to allow their shares to be valued as if the action never took place.
In such cases, many states value the stockholder’s interest as what it was immediately before the change; it does not reflect the effect of the proposed change on the value of the corporation. In these instances, the value is generally determined according to the standard of fair value based on the case law within the state of incorporation. We work closely with legal counsel to make sure that the correct standard of value and the rules of the particular jurisdiction are being factored into our valuation.
- Commercial Damages- An expert valuation of economic damages is of great assistance to legal counsel in cases where diminution of business value or lost profits is an issue. Such issues arise during breach of contract lawsuits, anti-trust violations, and other legal actions involving damages. Almost all commercial litigation involves a computation of damages.
The essence of many suits is the amount of damages. Determining what a sales person is owed in commissions, based upon sales and his or her commission formula; determining lost profits as a result of a negligent action or other tort, including lost opportunity costs; and calculating damages for breach of fiduciary responsibility by investment advisors all are opportunities to use the expertise of our team. Computing damages is a complex issue and we may use a number of different methods and models.
6. Fairness Opinions. Closely held businesses often require the services of experts to properly navigate towards financial success in today’s complex and competitive environment.
Valuations performed in anticipation of certain transactions and/or events are considered prudent. Corporate principals, directors and counsel should weigh the advantages of obtaining a professional, independent and objective valuation prepared by a specialist in valuation and financial opinions.
There are many reasons for fairness opinions, most of which deal with transactions involving securities of both closely held and publicly traded companies. A financial opinion may be required to assist in the redemption of securities, the exchange of cash and debt for securities, etc. An independent opinion of fairness relative to the exchange of values involved can provide substantial support for such exchanges. Furthermore, independent fairness opinions are useful as a defense against dissident shareholder claims.