Our Services
Business valuation is a very dynamic industry
It has evolved, and continues to evolve to this day, with new valuation methodologies, techniques and resources available for analysts to consider. This means keeping apprised of the latest developments within the industry as it relates to the various areas of service EBV provides.
Regardless of the reason for a valuation, the process involves an in-depth, thorough analysis of the subject business / entity; the industry and economy it operates in; the business’s financial trends, profitability, capital structure, growth prospects; among other analysis. This requires the proper training and credentials in accordance with the appropriate valuation standards.
EBV performs business valuations for a variety of purposes involving small to medium-sized operating companies, family limited partnerships and trusts, among others.
- Estate & Gift Tax
- Equity-Based Compensation
- S Corp Conversions
Anonymous: "A fine is a tax for doing something wrong. A tax is a fine for doing something right".
Snoopy: "Dear IRS, I am writing to you to cancel my subscription. Please remove my name from your mailing list".
Paying taxes on your hard work and labor is unavoidable. But with proper tax planning strategies, taxpayers can minimize their tax burden and doing it the right way is imperative in order to withstand IRS scrutiny and challenge. There are set IRC guidelines for valuing, documenting and reporting business interests in the context of gift and estate tax matters.
The IRS requires that an appraisal report of a business interest be performed by a “Qualified Appraiser” which is defined by the IRS Regulations in Section 170(f)(11) of the IRC as an individual who (1) has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education requirements and experience requirements set forth in regulations prescribed by the Secretary, (2) regularly performs appraisals for which the individual receives compensation, and (3) meets such other requirements as may be prescribed by the Secretary in regulations or other guidance.
Regardless of the reason for a business valuation, always be sure to utilize the services of a professional who has the appropriate designations or certifications in business valuations from the various reputable organizations. As a trained valuation specialist, Mr. Wilson has an in-depth understanding of the various issues and nuances that are inherent in the valuation process. Mr. Wilson is credentialed as Accredited in Business Valuation (ABV) by the AICPA and is recognized as a Certified Valuation Analyst (CVA) by NACVA (National Association of Certified Valuators and Analysts).
For more information about tax-driven valuation services and how EBV can help you with you or your client's valuation needs, please contact Kevin Wilson at cell-(305) 926-5354 or office-(717) 900-1753 or by email at kwilson@ebvaluation.com
Family Limited Partnerships have long been a very effective tool for taxpayers in terms of asset protection, dispute resolution and benefiting from the favorable tax treatments in gifting interest. The tax benefits are realized from a reduction in the pro-rata asset value by two discounts commonly used: discount for lack of control and discount for lack of marketability. These two discounts are applied because an investor would not buy a limited partner interest for its pro-rata value since he/she would have no control over the partnership's assets and there is no market to liquidate the investment.
Since the discounts are an area that the IRS typically scrutinizes and challenges. it is essential that taxpayers properly document any gift transfers. Hiring an untrained, inexperienced appraiser who uses inappropriate valuation methodologies, performs analysis that is not well-supported and produces a poorly written report in the eyes of the IRS may lead to IRS challenges - something taxpayers try to avoid in the first place.
Whether an FLP owns an interest in an operating company, hold’s marketable securities, real estate, etc., EBV has the expertise and qualifications to meet your tax compliance needs
There are numerous reasons why business owners sell their business or need an exit strategy – the most common being a planned retirement, a new business opportunity arises or for unforeseen health or financial matters. Whatever the circumstance, when business owners are thinking or planning to move on, they would, of course, seek to maximize the value they’ve created.
A professional business valuation can help out tremendously in establishing a value (or range of values) for the business and / or play a critical role in the exit planning process. Call to discuss how EBV can help you with your strategic goals.
Corporate officials (CEO’s, CFO’s, Controllers, etc.) as well as CPA’s that are conflicted out often rely on experienced professionals to perform supportable valuation analysis for their financial reporting needs. Financial reporting valuations need to be well-supported and stand up to rigorous review and scrutiny from auditors and company personnel as well as comply with US accounting standards. EBV has the expertise in the following financial reporting areas:
Purchase Price Allocations - Accounting Standards Codification (“ASC”) 805 (formerly SFAS No. 141 and 141R) deals with business combinations where the acquirer must recognize the Fair Value (as defined) of certain assets acquired and liabilities assumed. Intangible assets must meet certain identification criteria and may include customer lists, trademarks, trade name, technology and goodwill, among others.
Impairment Testing – Under ASC 350 (formerly SFAS 142), a company may be required to have the goodwill and any other intangible assets recorded on the books tested annually for possible impairment. There are specific steps involved in the impairment analysis process and if the fair value of the entity (or reporting unit) is less than the carrying amount of its assets, an impairment exists.
EBV has the expertise to provide the requisite analysis and services to comply with financial reporting requirements of ASC.
Many privately-held businesses have more than one owner or partner so having a well-crafted buy-sell agreement can address the unplanned departure of one of the parties.
Like insurance, you don’t need it until you need it! At the very least, a buy-sell agreement should address the following issues:
- Specific triggering events (such as departure, illness, death, etc.) of one owner / partner;
- Establishing a sound methodology for valuing the subject ownership interest;
- Specify the funding source(s) to pay for the subject ownership interest;
- Craft the agreement in a manner acceptable to the interested parties including the legal and tax authorities.
The keys to a well-thought out buy-sell agreement is fairness to all owners, affordability and tax implications.
At EBV, Mr. Wilson has an in-depth understanding of the various issues that are inherent in the valuation process regarding buy-sell agreements. Whether it’s performing a valuation of the business because of a triggering event, a periodic value update or consultation on the various factors in establishing a valuation methodology, EBV can provide the expertise you need.
EBV can assist in various litigation-related matters, including:
- Shareholder and partner disputes
- Commercial litigation
- Minority shareholder oppression matters
- Divorce cases
EBV's opinions are based on sound valuation techniques with assumptions that are well-supported – which is critical in a litigation setting.
At Equitable Business Valuation, we offer the following services to CPA firms and business owners/management to assist them in a variety of areas they need expertise in:
- Report review
- Industry pricing / transaction multiples research
- Industry financial benchmarking
- Guideline public company research
- Industry profile and data research
We can help CPA’s better serve their clients and help business owners/management make informed decisions with professional research supported by reliable, independent and trusted resources and databases. At EBV, we respect the relationship between CPA’s and their clientele and would never offer or solicit services of any type to their clients or jeopardize client relationships. EBV seeks to maintain a high level of trust among the all professionals we do business with.
In a marital dissolution or divorce setting, often is the case where the couple’s assets include a certain ownership interest in a closely-held business that needs to be valued. There are many factors that an appraiser must consider in divorce / marital dissolutions that may not be relevant in valuations for other purposes (like tax compliance or financial reporting valuation). In some states, there is the issue of goodwill (professional v. enterprise) and the standard of value for one state may be different for another. How these issues are handled depend on the particular jurisdiction.
It is critical that attorneys hire valuators who have the proper experience and accreditations and judges give more credibility to credentialed professionals than those who are not. At EBV, we have the credentials and experience to provide credible and reliable valuation analysis - particularly when addressing the issues specific to marital dissolutions / divorce cases.