The Handbook for Divorce Valuations

by Kleeman, Robert E.; Alerding, R. James; Miller, Benjamin D.

• ISBN13: 9780471299660
• ISBN10: 0471299669
• Edition: 1st
• Format: Hardcover
• Copyright: 1999-09-27
• Publisher: Wiley

Summary

Divorce litigants depend on thorough, competent professionals to represent their interests. The Handbook for Divorce Valuations helps practitioners ensure that their clients will receive the very best possible representation.

Author Biography

ROBERT E. KLEEMAN JR., CPA/ABV, ASA, CVA, is a member and the Director of Litigation & Valuation Services for Clifton Gunderson, LLC, a large regional public accounting firm. Mr. Kleeman has been providing valuation services since 1975, and has limited his practice to litigation support and business valuation since 1982. R. JAMES ALERDING, CPA/ABV, ASA, CVA, is a member and a regional coordinator of Litigation & Valuation Services for Clifton Gunderson, LLC, a large regional public accounting and consulting firm. Mr. Alerding has been providing valuation services since 1980, and limits his practice primarily to litigation support and business valuation. BENJAMIN D. MILLER, CPA, ASA, is a manager and a regional coordinator in the Litigation & Valuation Services Group for Clifton Gunderson, LLC. Mr. Miller has been providing business valuation services since 1985.

Table of Contents

Foreword	xv	(2)
Preface	xvii	(2)
Acknowledgments	xix
1 Introduction	1	(6)
Understanding the Litigation Environment	1	(1)
Services to Be Provided	2	(2)
Valuation Services	2	(2)
Expert Services	4	(1)
About This Book	4	(3)
2 Valuation Approaches and Applicability to Divorce Practice	7	(14)
Standards of Value	7	(3)
Valuation Approaches	10	(10)
Asset Approach	11	(4)
Income Approach	15	(2)
Market Approach	17	(3)
Summary	20	(1)
3 Engagement Acceptance and Administration	21	(10)
Preengagement Procedures	21	(1)
Conflicts of Interest	22	(3)
Expertise, Competence, and Time Commitment	25	(2)
Profitable Engagements	27	(1)
Engagement Letter	28	(1)
Retainer and Billing	29	(1)
Summary	29	(1)
Further Reading	30	(1)
4 The Engagement Process	31	(10)
In the Beginning	31	(1)
Defining the Scope of the Engagement	32	(2)
Defining Your Role	32	(1)
Defining Expectations	33	(1)
Setting the Plan	34	(2)
Keeping in Touch	36	(1)
Workpapers	37	(2)
Prior Workproduct	39	(1)
Summary	39	(2)
5 Data Collection and Analysis	41	(8)
Document Request Letter	41	(1)
Premise Inspection and Client Interview	41	(1)
Analyzing Financial Data	42	(4)
Valuation Software	46	(1)
Summary	47	(2)
6 Industry Information--Where to Find It and How to Use It	49	(6)
Financial Benchmarking Sources	49	(4)
Robert Morris Associates	50	(1)
The Almanac of Business and Industrial Financial Ratios	51	(1)
Financial Studies of Small Business	51	(1)
Other Financial Benchmarking Sources	52	(1)
Source of Economic Data	53	(1)
WEFA	53	(1)
U.S. Trade and Industry Outlook	53	(1)
National Economic Review	53	(1)
Other Data Sources	54	(1)
Summary	54	(1)
7 Are There Really Comparable Companies?	55	(8)
Publicly Traded Analysis Guidelines for Comparable Companies	56	(3)
Define the Selection Criteria	56	(1)
Perform a Search for Guideline Companies	57	(1)
Obtain Financial Data of the Guideline Companies	57	(1)
Review and Narrow the Guideline Companies	58	(1)
Analyze and Adjust Guideline Company Data	58	(1)
Derive Pricing Multiples	58	(1)
Adjust the Pricing Multiples	59	(1)
Privately Held Merger and Acquisition Data	59	(3)
Widely Used Databases	59	(2)
Other Sources of Transactional Data	61	(1)
Preparing the Data	62	(1)
Analyzing and Applying the Data	62	(1)
Summary	62	(1)
8 Discounts and Premiums	63	(10)
Valuation Methodology and Application of Discounts and Premiums	63	(1)
Control Premium	64	(1)
Minority Interest Discount	65	(2)
Discounts for Lack of Marketability	67	(3)
Summary	70	(3)
9 Goodwill in a Divorce Context	73	(8)
Defining Goodwill	73	(1)
Understanding State Interpretations	74	(2)
Personal Versus Entity Goodwill	76	(4)
The Valuator's Goal	80	(1)
Summary	80	(1)
10 Arriving at a Conclusion of Value	81	(12)
Selecting the Valuation Approach	81	(3)
Ranges Versus Specificity	84	(1)
Estimates of Value	84	(1)
Documenting the Conclusion	85	(3)
The Written Report	85	(1)
Full Versus Basic Reports	85	(1)
Elements of a Good Report	86	(2)
What Is USPAP?	88	(2)
Why Does USPAP Apply to Divorce Engagements?	89	(1)
USPAP Guidance	89	(1)
Other Professional Standards	90	(2)
American Institute of Certified Public Accountants	91	(1)
American Society of Appraisers	91	(1)
Institute of Business Appraisers	92	(1)
National Association of Certified Valuation Analysts	92	(1)
Summary	92	(1)
11 The Deposition	93	(6)
Three Rules for Successful Depositions	94	(1)
The Opposing Attorney's Goals in the Deposition	95	(1)
Your Goals during the Deposition	96	(1)
Deposition Strategies	97	(1)
Reviewing Your Deposition	97	(1)
Attendance at the Opposing Expert's Deposition	98	(1)
Summary	98	(1)
12 Preparing for the Trial	99	(8)
Preparation, Preparation, Preparation	99	(3)
Scripts Versus Outlines	100	(1)
Prepare to Handle the Inherent Weaknesses in the Case	101	(1)
Review the Events Leading up to Trial	102	(1)
Learn about the Trier of Fact	102	(1)
Review Expected Cross-Examination	103	(1)
Get Comfortable with Your Upcoming Trial Experience	104	(1)
Relax	105	(1)
Be Ready to Teach	105	(1)
Summary	105	(2)
13 Direct Examination	107	(12)
The Truth, the Whole Truth, and Nothing But the Truth	107	(1)
Getting Comfortable	107	(2)
Painting the Picture, Telling the Story	109	(1)
Working Through Your Presentation	110	(1)
Teach, Do Not Lecture	111	(2)
The Theory of Effective Teaching	113	(1)
Develop the Logic of Your Conclusions	114	(1)
Keep the Presentation Interesting	115	(1)
Keep It Simple, Stupid (KISS)	115	(1)
Be an Orator	116	(1)
Summary	117	(2)
14 Surviving Cross-Examination	119	(6)
What the Opposing Counsel is Trying to Do	120	(1)
Handling the Cross-Examination	121	(4)
15 Business Valuation Credentials, Organizations, and Professional Standards	125	(80)
Accredited in Business Valuation	125	(1)
AICPA Business Valuation Standards	126	(1)
Accredited Senior Appraiser	126	(1)
ASA Business Valuation Professional Standards	127	(43)
Certified Business Appraiser	170	(22)
Certified Valuation Analyst	192	(13)
16 Marketing the Divorce Practice	205	(8)
Type of Services	206	(1)
What Attorneys Look For	207	(1)
Identify the Market and the Competition	208	(1)
Let the Users Know You Want the Work	209	(1)
Making Contact	209	(2)
Speaking Engagements	209	(1)
Volunteer or Pro Bono Work	210	(1)
Newsletters or Brochures	210	(1)
Summary	211	(2)
Appendix A Library and Reference Materials	213	(4)
Books	213	(2)
Periodicals and Databases	215	(2)
Appendix B Forms	217	(20)
Sample Engagement Letter	217	(2)
Sample Valuation Information Questionnaire	219	(16)
Simplified Data Collection Checklist	235	(2)
Appendix C Revenue Rulings	237	(20)
Revenue Ruling 59-60	237	(7)
Revenue Ruling 68-609	244	(2)
Revenue Ruling 77-287	246	(5)
Revenue Ruling 83-120	251	(4)
Revenue Ruling 93-12	255	(2)
Index	257