Business Valuation and Financial Litigation—How to Do It: From Foundations to Advanced

WACC—Wacky or Necessary?

Tuesday, December 11
10:00 a.m.–12:30 p.m.
This session will be a discussion about the relevance and applicability of the Weighted Average Cost of Capital (WACC) to the valuation of closely held businesses. There will be a practical presentation explaining the theory and application of the WACC. On that foundation, the presenters will offer opposing opinions regarding what circumstances make the WACC useful vs useless. Examples will be given of the application of WACC including common errors, traps, tricks, and shortcuts. It will be a lively, but friendly, debate on the utilization of WACC to determine the risk rate.

After completing this session, attendees will be able to:

• Explain and defend the use of WACC
• Evaluate the application of the method by other (opposing) experts
• Assess whether the use of WACC is appropriate
• Avoid common mistakes and traps inherent in the use of WACC

Total CPE: 3 Hrs
Field(s) of Study: 3 Hrs—Finance

Who Should Attend:

Valuation consultants, CPAs, business owners, practitioners who are interested in starting or growing their business consulting practice.

Prerequisites:

Basic: Learning activity level most beneficial to individuals new to a skill or an attribute

Advanced Preparation:

None

Chris Hamilton

Chris  Hamilton

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Mark Kucik

Mark  Kucik

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Update—Business Divorce Litigation Current Trends

Tuesday, December 11
10:00 a.m.–12:30 p.m.
This session will focus on common and unique attributes that arise in business divorce for non-public companies from the attorney and expert perspective. It will include difficulties faced in obtaining discovery when representing minority owners, impact of negative inferences, valuation issues/limitations under state statutes/case law, and issues faced in the complaint and counter-claims process. Current update of various state laws and trends in business divorce litigation.

After completing this session, attendees will be able to:

• Identify real-life issues encountered and how to respond to them in a business divorce action
• Interact with counsel to address issues encountered in business divorce engagements
• Demonstrate knowledge in investigating claims and identify relevancy or impact to the case
• Demonstrate skills to effectively ask information-seeking questions for use in a shareholder dispute or forensic report

Total CPE: 3 Hrs
Field(s) of Study: 2 Hr—Accounting; 1 Hr—Personal Finance

Who Should Attend:

Fraud and litigation practitioners who offer fraud or litigation services. Business valuation analysts at all levels. Sole practitioners as well as CFOs, controllers, and financial managers in business and industry. All other senior financial professionals involved in business divorce litigation.

Prerequisites:

Update: Learning activity level that provides a general review of new developments

Advanced Preparation:

None

Hubert Klein

Hubert  Klein

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Nicholas San Filippo IV

Nicholas  San Filippo IV

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What I've Learned from Tax Court and IRS Gift and Estate Tax Audits

Tuesday, December 11
1:30 p.m.–3:10 p.m.
Based on the presenter's experience in tax court and some recent audits of family limited partnerships, his session will share some of the knowledge he has learned about how the audit to tax process works. Also, in both of these audits, he will use them as a case study to show how he valued the interest and how the IRS attacked them. Both Tax Court cases and both audits turned out in favor of the taxpayer.

After completing this session, attendees will be able to:

• Identify how the Tax Court process works
• Identify some of the red flags that might draw IRS Scrutiny
• Analyze two case study IRS audits to help build a stronger appraisal report in the future
• Prepare themselves for future audits, appeals, and Tax Court testimony

Total CPE: 2 Hrs
Field(s) of Study: 1 Hr—Finance; 1 Hr—Taxes

Who Should Attend:

Valuation consultants, CPAs, business owners, practitioners who are interested in starting or growing their business consulting practice.

Prerequisites:

Basic: Learning activity level most beneficial to individuals new to a skill or an attribute

Advanced Preparation:

None

Bruce Johnson

Bruce  Johnson

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An Overview of Damages and the Role of the Damages Expert in Intellectual Property

Tuesday, December 11
1:30 p.m.–3:10 p.m.
Program will describe the categories of damages plaintiffs typically seek in patent infringement and trade secret misappropriation cases and discuss how these damages are typically derived by a damages expert and identify areas of possible rebuttal.

After completing this session, attendees will be able to:

• Identify categories of damages in intellectual property matters
• List a variety of methods damages experts typically employ in deriving those damages
• Differentiate between lost profits and reasonable royalty analyses and how the income and market approach can and have been used in the past in these types of cases
• Define market share analyses in deriving lost profits; multivariate regression analysis in deriving lost profits; examine the Georgia Pacific factors from a valuation perspective

Total CPE: 2 Hrs
Field(s) of Study: 1 Hr—Business Law; 1 Hr—Economics

Who Should Attend:

CEOs, CPAs, attorneys, anyone involved or possibly involved in IP litigation

Prerequisites:

Basic: Learning activity level most beneficial to individuals new to a skill or an attribute

Advanced Preparation:

None

Richard Eichmann

Richard  Eichmann

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Calculating the Business Interruption Claim

Tuesday, December 11
3:30 p.m.–5:10 p.m.
The insured has located his or her business interruption (BI) policy and gathered all the documents necessary to make his or her claim. Now what? Being able to sort through all the information available to cull it down to the necessary information needed to calculate the claim can be difficult. This session will educate the insured on how to calculate, present, and support his or her claim for a business interruption loss, as well as present to the insurer.

After completing this session, attendees will be able to:

• Perform a BI calculation and present the insured's BI claim
• Explain the components of the insured's BI calculation/claim
• Point to the BI policy language to support the BI calculation/claim

Total CPE: 2 Hrs
Field(s) of Study: 2 Hrs—Accounting

Who Should Attend:

Valuation consultants, CPAs, business owners, and attorneys.

Prerequisites:

Overview: Learning activity level that provides a general review of a subject area from a broad perspective

Advanced Preparation:

None

Kerrie Merrifield

Kerrie  Merrifield

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Avoiding "Unintentional Bias" in Your Valuation

Tuesday, December 11
3:30 p.m.–5:10 p.m.
Valuations conducted for gift and estate or litigation carry with it perceptions of unintended biases. Whether conducting your own valuation or reviewing work of others due to the nature of these types of valuation, valuators may fall susceptible to client or attorney expectations. This session will look at the decision tree of valuations and correlation of how decisions effect a business valuation. When hired to review a valuation an appraiser may fall susceptible to pitfalls if you are not aware of proper review standards. This session will also look at the NACVA review standards and USPAP review standards.

After completing this session, attendees will be able to:

• Identify and avoid unintended biases
• Demonstrate the steps to properly review another appraisers work
• Improve the overall quality and objectiveness of your valuation opinion

Total CPE: 2 Hrs
Field(s) of Study: 2 Hrs—Finance

Who Should Attend:

Fraud and litigation practitioners who offer fraud or litigation services. Business valuation analysts at all levels. Sole practitioners as well as CFOs, controllers, and financial managers in business and industry. All other senior financial professionals involved in business divorce litigation.

Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area

Advanced Preparation:

None

Marc Bello

Marc  Bello

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Modeling and Discounting Damages—Ten Challenging Questions and Answers

Wednesday, December 12
10:00 a.m.–12:30 p.m.
An exploration of using a discount rate to address and adjust for a variety of important considerations in computing lost profits and lost business value damages, including hoped-for or optimistic outcome projections, achievement risk in expected outcome projections, before-tax vs. after-tax models, and the potential taxability of the damages award.

After completing this session, attendees will be able to:

• Appreciate the advantages and disadvantages of addressing achievement risk through the discount rate versus within the undiscounted projection (e.g., spreadsheet model)
• Understand the behavior of a discount rate over the full extent of the damages period compared to period by period within the damages time frame
• Avoid mistakes in developing a discount rate for a before-tax v. after-tax projection model when the corresponding objective is to compute either a before-tax or after-tax damages award

Total CPE: 3 Hrs
Field(s) of Study: 3 Hrs—Finance

Who Should Attend:

Fraud and litigation practitioners who offer fraud or litigation services. Business valuation analysts at all levels. Sole practitioners as well as CFOs, controllers, and financial managers in business and industry. All other senior financial professionals involved in business divorce litigation.

Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area

Advanced Preparation:

None

Kerrie Merrifield

Kerrie  Merrifield

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Valuations of Franchise Businesses—Fast Food is Not Fast Food

Wednesday, December 12
10:00 a.m.–12:30 p.m.
The valuation of franchise businesses will highlight the nuances found in these engagements by focusing on the most pervasive of these entities, namely quick serve (i.e., fast-food) restaurants. This session will discuss specific areas related to the valuation of these entities in order to help prepare the analyst to properly plan these types of engagements and avoid potential problem areas

After attending this session, participants will be able to:

• Perform a BI calculation and present the insured's BI claim
• Explain the components of the insured's BI calculation/claim
• Point to the BI policy language to support the BI calculation/claim

Total CPE: 3 Hrs
Field(s) of Study: 3 Hrs—Accounting

Who Should Attend:

Fraud and litigation practitioners who offer fraud or litigation services. Business valuation analysts at all levels. Sole practitioners as well as CFOs, controllers, and financial managers in business and industry. All other senior financial professionals involved in business divorce litigation.

Prerequisites:

Intermediate: Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area

Advanced Preparation:

None

Rick Gray

Rick  Gray

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The Best of the Best Engagement Letters

Wednesday, December 12
1:30 p.m.–3:10 p.m.
This is a one of a kind session that is specifically designed to enhance the attendee's ability to draft a complete and proper engagement letter. This unique session will teach the attendees what to include in their engagement letters to protect them and their firms from potential major problems and disasters that can occur later in the engagement. Learn from the personal experiences of the presenter—both good and bad—that will be shared in this session.

After completing this session, attendees will be able to:

• Identify how to customize their engagement letters to comply with NACVA and AICPA standards
• Describe proper language that is crucial in the engagement letter to ensure their firm is properly protected and to optimize control on the engagement from the start to finish

Total CPE: 2 Hrs
Field(s) of Study: 2 Hrs—Communications and Marketing

Who Should Attend:

Any financial professional who wants to learn how to write an amazing engagement letter.

Prerequisites:

Basic: Learning activity level most beneficial to individuals new to a skill or an attribute

Advanced Preparation:

Previous training or experience with the fundamentals of accounting, finance, economics, and business writing.

Glenn Block

Glenn  Block

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Basic Divorce Taxation Including Changes Made Under the December 2017 Tax Cuts and Jobs Act

Wednesday, December 12
1:30 p.m.–3:10 p.m.
An overview of divorce taxation covering the “old” law, repealed by the December “Tax Cuts and Jobs Act (TCJA)” (P.L. 115-97), and the new tax provisions. The “old Law” under IRC Sections 71 and 215 remain in force for pre-2019 Agreements, thus understanding the parallel tax systems in place is critical. This session will also review Sec. 1041, Property Transfers Pursuant to Divorces, QDROs, and a brief discussion of the impact of TCJA on business valuation.

After completing this session, attendees will be able to:

• Compose an outline of IRC Sections 71 and 215
• Describe how TCJA impacts divorce business valuations
• State the impact of TCJA on Antenuptials, Post-Divorce Actions, and general case settlement negotiations

Total CPE: 2 Hrs
Field(s) of Study: 2 Hrs—Taxes

Who Should Attend:

Information Forthcoming

Prerequisites:

Basic: Learning activity level most beneficial to individuals new to a skill or an attribute

Advanced Preparation:

None

Jeff Urbach

Jeff  Urbach

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Electing Appropriate DLOM Models

Wednesday, December 12
3:30 p.m.–5:10 p.m.
Valuation analysis is designed to provide a time specific estimate of value. This wide variation in volatility and liquidity across time periods and size deciles suggests that option model based measures of DLOM derived using contemporaneous inputs may track the observed discounts more closely than historical averages from studies covering different time periods and including firm sizes different from the subject interest. We use the CRSP data to develop estimates of the exchange ratios and resulting discounts for each of the months in the sample period for AAP BSP and LBP models. We identify transactions where each of these models is appropriate as a measure of DLOM.

After completing this session, attendees will be able to:

• Identify appropriate option based DLOM models to match the fact pattern of the case
• Apply appropriate DLOM measures and substantiate your analysis


Total CPE: 2 Hrs
Field(s) of Study: 1 Hr—Accounting; 1 Hr—Finance

Who Should Attend:

CPAs, attorneys, practitioners

Prerequisites:

Advanced: Learning activity level most useful for individuals with mastery of the particular topic. This level focuses on the development of in-depth knowledge, a variety of skills, or a broader range of applications

Advanced Preparation:

Working knowledge of DLOM models

Dr. Ashok Abbott

Dr. Ashok  Abbott

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Expert Witnesses—Where Truth and Advocacy Collide

Wednesday, December 12
3:30 p.m.–5:10 p.m.
In the world of litigation, retaining counsel is clearly an advocate for his or her client. Accordingly, counsel wants the expert to give testimony that supports counsel’s theory of the case. At the same time, the trier-of- fact - the judge and jury want the expert to give expert testimony that is truthful, regardless of which side of the case it supports. This dichotomy often creates awkwardness for the expert who wants to remain unbiased and objective while at the same time fulfilling retaining counsel’s needs in the case. In this session we will explore the challenges that counsel and the facts of the case present to the expert and how to avoid the awkwardness and risks that the dichotomy of objectives present.

After completing this session, attendees will be able to:

• Explain the differences between truth and advocacy
• Separate the facts of the case from counsel’s spin on the case
• Describe strategies to deal with retaining counsel when there is a request for biased testimony
• Outline approaches to deliver unbiased testimony in matters with problematic facts
• Structure approaches to maintain credibility, notwithstanding the challenges presented by retaining counsel


Total CPE: 2 Hrs
Field(s) of Study: 2 Hrs—Business Law

Who Should Attend:

Information Forthcoming

Prerequisites:

Basic: Learning activity level most beneficial to individuals new to a skill or an attribute

Advanced Preparation:

None

Michael Kaplan

Michael  Kaplan

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