Can goodwill hold up in a bad economy?
Privately owned companies can’t escape the effects of a slowed economy — for instance, the possibility of impaired values. Goodwill and other indefinite-lived (and long-lived) intangible assets may decline in value. Impaired values might require corrective action to conform with Generally Accepted Accounting Principles (GAAP). This article discusses several recent standards, including Financial Accounting Standards Board Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements, which provide guidelines for impairment testing. The article points out that valuators are often called in to handle these assignments because they are familiar with current standards and can add objective credibility to the process for auditors.

Ready, set, go
How to ensure your valuation goes as planned
Miscommunication and ambiguity early in the valuation process can be frustrating and costly later. This article presents some issues business owners and attorneys should discuss with prospective valuators, including the company’s entity type, size and industry classification code, the appropriate standard of value for the purpose, and what type of report format will best suit their needs. The article notes that it’s best to summarize the assignment’s scope and establish an understanding of the appraiser’s duties and responsibilities in an engagement letter up front.

Bridging the gap between public and private firms
Transactions of public company shares can sometimes represent good benchmarks for appraisers valuing private businesses, but many privately held business owners wonder whether it’s even possible to compare small businesses with large, publicly traded corporations. While the two types of businesses differ significantly, experienced valuation professionals understand the differences — and how to account for them with well-thought-out, supportable adjustments. This article explains the distinctions between the two types of companies and how appraisers can use public market data as a resource to value even the smallest private company.

Joint appraisal: The power of one
This brief article points out that a joint appraisal can be useful in some situations, including divorce, by facilitating information sharing to streamline the valuation process and minimize divergent opinions. In fact, some jurisdictions mandate the use of a joint appraiser when the marital estate includes a privately held business interest. The article notes the potential pitfalls, but suggests that using a joint appraiser can often save both money and time.