No question: Onsite interviews provide value
While financial statements, tax returns and Web sites provide some insight into value, the valuator gets the most complete picture by also physically touring the business’s facilities and speaking with managers face-to-face. This article discusses the areas often covered in an interview, which may include corporate culture and strategy, marketing and sales, and internal controls and governance. The article cites several recent cases that illustrate the importance of onsite interviews in generating credible value conclusions that stand up in court.

Case Citations:
Gaskill v. Robbins, 2007-SC-000190-DGE, 2007-SC-000207-DGE, Feb. 19, 2009
Anzalone v. Anzalone, 2003 PA Super 407, Oct. 28, 2003
Estate of Adams v. Commissioner, T.C. Memo. 2002-80, March 28, 2002
Kohler v. Commissioner, 2006 T.C. Memo. LEXIS 156.

Exit stage right
A good exit strategy is worth its weight in gold
In these uncertain economic times, having a sound exit strategy — including a plan for passing on responsibility for running the company, transferring ownership and extracting money — can be a great help to those who take over the business. The optimal exit plan depends not only on the transfer scenario, but also on the owner’s personal needs and objectives. This article sets forth some common exit strategies and their pros and cons.

Solving the puzzle
How to find the right-size discount or premium
Valuation discounts and premiums can be difficult pieces to fit into the valuation puzzle. They may be somewhat subjective, and valuators may use methods that preclude the need to subtract discounts — or add premiums. This article explains how discounts and premiums relate to marketability and investor control and how valuators typically go about finding and supporting them.

Take control of subsequent events
How do valuators handle an event that occurs after the valuation date, but before the report is published? Usually valuators consider only circumstances and events that exist or occur before and up to the valuation date. But subsequent events that were “known, knowable or foreseeable” on the valuation date are fair game. This brief article looks at Estate of Noble, a Tax Court case that draws an important distinction between subsequent events that affect value and those that provide evidence of value.

Case Citations:
Estate of Noble v. Commissioner, T.C. Memo. 2005-2, Jan. 6, 2005.