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  1. <?xml version="1.0" encoding="utf-8"?><rss xmlns:a10="http://www.w3.org/2005/Atom" version="2.0"><channel><title>BVWire News</title><link>https://www.bvresources.com/</link><description>BVWire News brings you current news from the buzz of the latest professional conference or the best new financial research resources, to the impact of last week's tax case. </description><category>valuation methods &amp; approaches</category><category>appraisal standards and regulations</category><category>business valuation accrediting organizations</category><category>economic damages &amp; lost profits</category><category>estate and gift taxation</category><category>contract</category><category>cost of capital</category><a10:contributor><a10:name> </a10:name></a10:contributor><a10:contributor><a10:name> </a10:name></a10:contributor><a10:link rel="self" type="application/rss+xml" href="https://www.bvresources.com/feeds/bvwire-news" /><item><guid isPermaLink="false">urn:uuid:780eb652-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/11/14/multiple-lines-of-business-let-me-count-the-ways</link><a10:author><a10:name> </a10:name></a10:author><category>valuation methods &amp; approaches</category><title>Multiple Lines of Business—Let Me Count the Ways</title><description>Recently, I read an article from McKinsey titled “How CEOs Are Turning Corporate Venture Building Into Outsize Growth." While the article and survey are about what the title indicates, it reminded me of a broader valuation issue: What do I do when a business I am valuing has multiple lines of business?</description><pubDate>Thu, 14 Nov 2024 17:55:16 Z</pubDate><a10:content type="text">&lt;p&gt;Recently, I read an article from McKinsey titled &amp;ldquo;How CEOs Are Turning Corporate Venture Building Into Outsize Growth.&amp;rdquo;&lt;sup&gt;1&lt;/sup&gt;&amp;nbsp;While the article and survey are about what the title indicates, it reminded me of a broader valuation issue: What do I do when a business I am valuing has multiple lines of business? The answer, of course, is that the facts and circumstances and your professional judgment will determine the approach you use to value the business.&lt;/p&gt;
  2. &lt;p&gt;An example will help to make the point. A divorce case I was involved with some years ago dealt with the valuation of a business that had multiple lines of business&amp;mdash;if you were paying attention. The husband&amp;rsquo;s business made tungsten products. Tungsten is one of the heaviest metals on earth. A lot of their products were related to using tungsten for ballast, for example, in aircraft. This primary line of business was sold to customers from the public. The business also had a second business, which made a specific product for the United States military. It was a secret product, and, even as a valuator, I was not allowed to know what the product was. This was a tungsten product also. It was the subject of a contract with the U.S. government for a defined period. The company had been notified that the government would discontinue the product at the end of the contract period, which was six years from the valuation date.&lt;/p&gt;
  3. &lt;p&gt;The opposing valuator valued both business lines as though they were a single product. However, I valued the government contract product as a separate line with a separate forecast of revenues and profits for a six-year period and used a terminal value equal to the liquidation value of the manufacturing equipment for the line discounted to a present value.&lt;/p&gt;
  4. &lt;p&gt;Just because multiple business lines are within a single legal entity does not mean that the operations should be valued as a single combined result. Multiple business lines should be valued separately where appropriate.&lt;/p&gt;
  5. &lt;hr /&gt;
  6. &lt;sup&gt;1&lt;/sup&gt; Oct. 22, 2024, Survey, McKinsey and Co.; &lt;a href="https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/how-ceos-are-turning-corporate-venture-building-into-outsize-growth"&gt;mckinsey.com/capabilities/mckinsey-digital/our-insights/how-ceos-are-turning-corporate-venture-building-into-outsize-growth&lt;/a&gt;.&amp;nbsp;</a10:content></item><item><guid isPermaLink="false">urn:uuid:dbfbb552-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/11/01/nacva-creates-new-'advisory-briefs'-and-issues-the-first-one-on-'the-use-of-artificial-intelligence-and-machine-learning'</link><a10:author><a10:name> </a10:name></a10:author><category>appraisal standards and regulations</category><title>NACVA Creates New 'Advisory Briefs' and Issues the First One on 'The Use of Artificial Intelligence and Machine Learning'</title><description>Parnell Black, NACVA’s co-founder and CEO, has announced that NACVA has issued its first Advisory Brief on “The Use of Artificial Intelligence and Machine Learning.” This is the first such AI advisory from the major business valuation organizations.  </description><pubDate>Fri, 01 Nov 2024 17:42:47 Z</pubDate><a10:content type="text">&lt;p&gt;Parnell Black, NACVA&amp;rsquo;s co-founder and CEO, has announced that NACVA has issued its first Advisory Brief on &amp;ldquo;The Use of Artificial Intelligence and Machine Learning.&amp;rdquo; This is the first such AI advisory from the major business valuation organizations.&lt;/p&gt;
  7. &lt;p&gt;In Parnell&amp;rsquo;s words, &amp;ldquo;the concept of the Advisory Brief was born. We expect this platform will be used to provide guidance in a number of areas and coming from all our boards and commissions, but not with the intent of shackling our members with rules and regulations, must do&amp;rsquo;s and should do&amp;rsquo;s, but with thoughtful perspective that helps members get a better sense for how a consensus of thought leaders view certain matters pressing upon the profession.&amp;rdquo;&lt;/p&gt;
  8. &lt;p&gt;Specifically:&lt;/p&gt;
  9. &lt;p style="margin-left: 40px;"&gt;An Advisory Brief provides non-authoritative guidance to the Association's credential designees and membership. It is issued by NACVA&amp;rsquo;s boards, commissions, task forces, teams, or committees and represents the perspective of a formal body within the Association. It offers additional insights that members may utilize or build upon. (See Disclaimer of Published Information) Should a member wish to seek additional information, they can submit their request via e-mail to the Chair of NACVA&amp;rsquo;s Executive Advisory Board (EAB), who will direct it to the appropriate body.&lt;/p&gt;
  10. &lt;p&gt;The new Advisory Brief on AI is concise (only two pages) but adequately gets the point across and provides guidance for its members. There will be other Advisory Briefs on other topics in the future, but, in my opinion, this one is well thought out and accomplishes its mission.&lt;/p&gt;
  11. &lt;p&gt;&amp;nbsp;&lt;/p&gt;
  12. &lt;p&gt;&lt;strong&gt;NACVA ADVISORY BRIEF: The Use of Artificial Intelligence and Machine Learning&lt;/strong&gt;&lt;/p&gt;
  13. &lt;p&gt;&amp;ldquo;This brief advocates for a thoughtful integration of AI and ML within the frameworks of professional valuation and/or forensic practice,&amp;rdquo; according to its introduction. It notes that constituents can leverage AI and ML technologies to augment but not to replace their expertise.&amp;nbsp;&lt;/p&gt;
  14. &lt;p&gt;In Section 2, the brief provides a needed definition of professional judgment as follows:&lt;/p&gt;
  15. &lt;p style="margin-left: 40px;"&gt;Professional judgment when incorporating AI and ML into an assignment refers to the constituent's capacity to make informed decisions grounded in knowledge, experience, education, training, and skills.&lt;/p&gt;
  16. &lt;p&gt;Section 3, on ethical considerations, instructs constituents who &amp;ldquo;[incorporate] AI and ML into an assignment must consider NACVA Ethical standards and considerations, particularly concerning confidentiality, data integrity, and non-discrimination.&amp;rdquo;&lt;/p&gt;
  17. &lt;p&gt;Section 4, on verification and reporting, notes that, &amp;ldquo;[w]hen incorporating AI and ML technologies, it is essential to verify the AI and/or ML outputs are not misleading.&amp;rdquo; It also points out that the analyst should disclose the use of AI and/or ML and that it was used in an ethical manner using professional judgment and due diligence.&amp;nbsp; Exhaustive disclosure is not intended.&lt;/p&gt;
  18. &lt;p&gt;Finally, in Section 5, the constituents are exhorted to remain abreast of technologies and methodologies and actively participate in professional development opportunities.&lt;/p&gt;
  19. &lt;p&gt;Being first is not often easy, but I personally believe that NACVA has taken a good lead on this important area.&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:5e96b552-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/09/24/american-society-of-appraisers-(asa)-2024-international-conference</link><a10:author><a10:name> </a10:name></a10:author><category>business valuation accrediting organizations</category><category>economic damages &amp; lost profits</category><category>estate and gift taxation</category><title>American Society of Appraisers (ASA) 2024 International  Conference</title><description>I had the pleasure of attending the 2024 ASA International Conference in Portland, Ore., September 15 to 19. This was my first time to visit Portland, Ore., and I found it to be a very pleasant and attractive place to be. The conference was held at the Downtown Hilton in Portland. </description><pubDate>Tue, 24 Sep 2024 21:29:21 Z</pubDate><a10:content type="text">&lt;p&gt;I had the pleasure of attending the 2024 ASA International Conference in Portland, Ore., September 15 to 19. This was my first time to visit Portland, Ore., and I found it to be a very pleasant and attractive place to be. The conference was held at the Downtown Hilton in Portland. The facilities there were adequate but not exceptional. There were some issues with the audio systems so that it was often difficult to hear the presenters in some of the rooms. No audio technicians were&amp;nbsp;in the rooms to remedy the situation, which I understand was the product of the ASA not having them (read: paying them) to be there and not an issue with the hotel.&lt;/p&gt;
  20. &lt;p&gt;The content of the conference was overall very good. As in all conferences, there are some good to outstanding presentations and some not so good. I managed a decent sampling of each. Following are some random comments on some of the presentations from the Business Valuation track.&lt;/p&gt;
  21. &lt;p&gt;
  22. &lt;strong&gt;Dancing With the Tax Man: Valuation and Other Issues in IRS Audits of Transfer Tax Returns&lt;/strong&gt;&lt;br /&gt;
  23. Stephanie Loomis-Price of Perkins Coie LLP gave this outstanding presentation. Members of the conference committee must have realized they had a hit with this presentation since they gave it an hour and a half on Day 1 and it was the only presentation in its time slot.&lt;/p&gt;
  24. &lt;p&gt;The presentation began with a section on gift tax cases. Most presentations deal with estate cases and not gift tax cases. There was a lot of helpful information, some specific to gifts and some globally applicable:&amp;nbsp;&amp;nbsp;&lt;/p&gt;
  25. &lt;ul&gt;
  26.    &lt;li&gt;A new discount for having a difficult partner is gaining acceptance. Such a discount could apply in any valuation setting and not just in tax-related valuations. (Alerding takeaway: In my experience reviewing and digesting valuation cases, such a discount makes a lot of common sense. Many cases deal with business divorces and, by definition, they likely if not always deal with a &amp;ldquo;difficult partner.&amp;rdquo; Put this on your radar screen.)&lt;/li&gt;
  27.    &lt;li&gt;Gift cases normally do not deal with underlying agreements (e.g., a partnership or LLC agreement). In some cases, however, the agreements become a necessity in determining whether or not a gift is eligible for the annual exclusion. For example, in the &lt;em&gt;Wimmer&lt;/em&gt; case, the court decided that the ability of beneficiaries of the gifts to receive annual income was sufficient for the gifts to be qualified for the exclusion. The IRS had argued that the restrictions on use and possession of the gifts made them such that there was no present interest to &amp;ldquo;gift.&amp;rdquo; The court disagreed.&lt;/li&gt;
  28.    &lt;li&gt;To &amp;ldquo;double your pleasure,&amp;rdquo; so to speak, use the same valuation to make annual exclusion gifts on December 31 of a year and then on January 1 of the next year.&lt;/li&gt;
  29.    &lt;li&gt;The speaker noted that, for Tax Court purposes, the expert is required to provide &lt;em&gt;all&lt;/em&gt; of your prior writings, speaking, webinars, etc. and that includes full copies of the presentations, articles, etc. if asked to do so, which the DOJ often asks for.&lt;/li&gt;
  30. &lt;/ul&gt;
  31. &lt;p&gt;&lt;strong&gt;The AI Revolution&lt;/strong&gt;&lt;br /&gt;
  32. The last presentation of the conference was on the AI revolution, presented by Greg Endicott, ASA; Kevin Couillard, ASA; and Andrew Couillard, ASA. The conference committee, whether intentionally or not, seemed to put the best two presentations at the beginning and the end, the alpha and the omega. As noted in the materials, this presentation will discuss AI and &amp;ldquo;what will be the impact of this technology on the appraisal profession and how it can be utilized in the performance of valuation work.&amp;rdquo;&lt;/p&gt;
  33. &lt;ul&gt;
  34.    &lt;li&gt;Greg started with some statistics from our own BVR survey on AI:&lt;br /&gt;
  35.    &lt;br /&gt;
  36.    &lt;ul&gt;
  37.        &lt;li&gt;Forty-eight percent of BV firms are using AI, primarily for researching economic or industry conditions;&lt;/li&gt;
  38.        &lt;li&gt;ChatGPT is the most popular AI tool, used by 70% of respondents; and&lt;/li&gt;
  39.        &lt;li&gt;Fifty-two percent of firms are not using AI due to trust issues, data confidentiality concerns, and fear of AI &amp;ldquo;hallucinations."&lt;/li&gt;
  40.    &lt;/ul&gt;
  41.    &lt;/li&gt;
  42. &lt;/ul&gt;
  43. &lt;ul&gt;
  44.    &lt;li&gt;Some of the models are now approaching or exceeding capabilities relative to humans (e.g., reading comprehension with unanswerable questions);&lt;/li&gt;
  45.    &lt;li&gt;The implications in the legal landscape of attribution to AI models are significant:&lt;br /&gt;
  46.    &lt;br /&gt;
  47.    &lt;ul&gt;
  48.        &lt;li&gt;Intellectual property rights; and&lt;/li&gt;
  49.        &lt;li&gt;Copyright infringement.&lt;br /&gt;
  50.        &lt;br /&gt;
  51.        &lt;/li&gt;
  52.    &lt;/ul&gt;
  53.    &lt;/li&gt;
  54.    &lt;li&gt;The speakers also discussed the myriad of concerns over the use of AI, such as accuracy, reliability, privacy, confidentiality, transparency, auditability, consistency, bias, data recovery, security, and ethics.&lt;/li&gt;
  55. &lt;/ul&gt;
  56. &lt;p&gt;The session on valuing the right of publicity (ROP) and name image and likeness (NIL) with Jay Fishman and Mark Roessler was an excellent presentation and an excellent view of a relatively new area of valuation and economic damages. Mark is a celebrity valuer and helped with Jay to get an excellent result in the Tax Court case involving the Michael Jackson estate. ROP recognizes an individual&amp;rsquo;s right to exploit his or her own name, image, and likeness for profit. NIL refers specifically to the use of these elements of an individual&amp;rsquo;s identity, primarily concerning athletes and celebrities.&lt;/p&gt;
  57. &lt;ul&gt;
  58.    &lt;li&gt;One of the biggest takeaways was what has already begun with the use of AI and what might happen in the future, especially in the area of digital twinning.&lt;/li&gt;
  59.    &lt;li&gt;They gave examples of both ROP and NIL. For example, Mark noted that both Arch Manning and Quinn Ewers are now at $10 million each in NIL value.&lt;/li&gt;
  60.    &lt;li&gt;The speakers also analyzed the &lt;em&gt;Jackson &lt;/em&gt;case as it relates to the NIL value for Michael Jackson post mortem. Mark derived a value of $3.1 million versus $161 from the IRS expert. Mark&amp;rsquo;s value included an analysis of actual deceased celebrities and their values. The court arrived at a value of $4.1 million.&lt;/li&gt;
  61.    &lt;li&gt;Another takeaway: There is no penalty for the IRS overvaluing or undervaluing an asset, whereas there are penalties against the valuation expert for such misvalues. It allows the IRS to get a result that leads to a large difference in value and impose very high penalties but be unrestricted in the amounts that it claims as a fair market value.&lt;/li&gt;
  62. &lt;/ul&gt;
  63. &lt;p&gt;There were other very excellent presentations providing information to business valuation professionals. Once again, there was a lot of good content in this conference. My colleague, Andy Dzamba, will also be providing his analysis of the conference in the &lt;em&gt;BVWire&lt;/em&gt; and/or the &lt;em&gt;Business Valuation Update.&lt;/em&gt;&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:0390b552-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/09/23/update-on-artificial-intelligence-superconvergence</link><a10:author><a10:name> </a10:name></a10:author><title>Update on Artificial Intelligence—Superconvergence</title><description>Get a look at some of the futuristic concepts discussed in the book Superconvergence  and look at how AI factors into all of it.</description><pubDate>Mon, 23 Sep 2024 20:55:00 Z</pubDate><a10:content type="text">&lt;p&gt;My sweet, wonderful wife, knowing of my keen interest in artificial intelligence (AI), surprised me with the gift of a book that she thought would be of interest on the subject of AI. It turns out the book was not just about AI but also about how artificial intelligence, gene editing, genome sequencing, and other revolutionary technologies are transforming our world and the future.&lt;/p&gt;
  64. &lt;p&gt;The book is appropriately titled &lt;em&gt;Superconvergence&amp;nbsp;&lt;/em&gt;and is written by Jamie Metzl.&amp;nbsp; Metzl is a technology and healthcare futurist and the founder and chair of OneShared.World. He has extensive experience with the U.S. government, the World Health Organization, and the United Nations. He has written several books in addition to &lt;em&gt;Superconvergence&lt;/em&gt;. I urge you to look him up to get a better understanding of his background. Suffice it to say that he is well qualified to write this book.&lt;/p&gt;
  65. &lt;p&gt;The book opened my eyes to a number of problems we face in the future, and Metzl offers solutions to all of them. Starting with information on AI and its progression into the future, the book then dives into other issues such as how we can continue, efficiently and properly, to feed our world&amp;rsquo;s growing population of now 8 billion people and expected to be 10 billion by 2050. He explains how the convergence of AI and healthcare technologies are extending life spans and helping to create the population growth. He explains that there are technologies already in existence or technologically able to be developed that will help solve a lot of the problems that will occur in the future. With the help of AI and gene sequencing, it is possible to &amp;ldquo;make&amp;rdquo; real meat from a single strip of cells from a single cow. The meat would be grown in large bioreactors. It is already happening on a smaller scale. Sounds like something out of "Star Trek," where they had a food replicator, doesn&amp;rsquo;t it?&lt;/p&gt;
  66. &lt;p&gt;The cow in the example is not a sacrificial cow since it can continue to live and contribute more &amp;ldquo;starter&amp;rdquo; strips in time. This process will reduce the number of cows needed in the world significantly, helping to free up land for other uses and reducing carbon emissions.&lt;/p&gt;
  67. &lt;p&gt;Getting back to the healthcare issues, AI can help in developing targeted healthcare treatments where the drugs and treatments are tailored to the individual and not just to a generic disease as is currently done.&lt;/p&gt;
  68. &lt;p&gt;There is much more in this interesting book. The author does tend to wander a bit (as I have done in writing this synopsis), and he slips in and out of climate change proselytizing and even admits to it once in the book. Despite these shortcomings, the book is an eye-opener. Did you know that we will run out of space in capturing and storing, especially long-term, all the data that we are and will be producing?&amp;nbsp; We need new technology! Silicon chips will not last for the long term before degrading. According to Metzl, we should be able to develop technology that will allow us to store data in the genes of living cells. The data can reside there for a very long time and can be retrieved. Bio computers are in our future also, using brain tissue and neurons.&lt;/p&gt;
  69. &lt;p&gt;I would encourage you to check this book out.&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:6989b552-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/09/18/crowd-strike-is-cloud-struck</link><a10:author><a10:name> </a10:name></a10:author><title>Crowd Strike Is Cloud Struck</title><description>Take a look back at the CloudStrike IT meltdown.</description><pubDate>Wed, 18 Sep 2024 15:53:58 Z</pubDate><a10:content type="text">&lt;p&gt;We have all heard about the massive global IT outage caused by a bug in a CrowdStrike windows update in its security software. The outage occurred on July 19, 2024. The outage impacted millions of computers on Microsoft systems platforms throughout the world. The hardest hit were airlines, hospitals, and healthcare organizations. But the outage interrupted and potentially damaged thousands of everyday businesses .&lt;/p&gt;
  70. &lt;p&gt;Not surprisingly, the lawsuits have already begun. The Plymouth County Retirement Association (Plymouth, Mass.) alleges CrowdStrike maintained deficient controls and did not adequately test its software, despite repeated statements touting the efficacy of the Falcon platform, according to the complaint filed Tuesday in the U.S. District Court for the Western District of Texas. They claim that the share price of CrowdStrike dropped precipitously, from $343.05 to $232.00 as a result of the outage. Delta Airlines, one of the hardest hit airlines as a result of the outage, believes its damages could be $500 million.&lt;/p&gt;
  71. &lt;p&gt;But those cases are just the tip of the iceberg for this matter. Many thousands of insurance claims for business interruption will be&amp;nbsp;filed. While many of the insurance companies might contend that the claims are not covered, these claims nevertheless will need to be quantified. That is where the forensic accountants and professionals come in. These claims will require independent determinations.&amp;nbsp;&amp;nbsp;&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:a349b552-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/08/20/several-cases-have-now-entered-the-covenant-not-to-compete-fray</link><a10:author><a10:name> </a10:name></a10:author><category>contract</category><title>Several Cases Have Now Entered the Covenant Not to Compete Fray</title><description>By way of background, on April 23, 2024, the Federal Trade Commission (FTC) issued a final rule to, in their words, “ promote competition by banning noncompetes nationwide, protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.”</description><pubDate>Tue, 20 Aug 2024 18:24:10 Z</pubDate><a10:content type="text">&lt;p&gt;By way of background, on April 23, 2024, the Federal Trade Commission (FTC) issued a final rule to, in their words, &amp;ldquo;promote competition by banning noncompetes nationwide, protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.&amp;rdquo;&lt;sup&gt;1&lt;/sup&gt;&lt;/p&gt;
  72. &lt;p&gt;The new rule defines a noncompete clause as &amp;ldquo;a term or condition of employment that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from (1) seeking or accepting work in the United States with a different person where such work would begin after the conclusion of the employment that includes the term or condition; or (2) operating a business in the United States after the conclusion of the employment that includes the term or condition.&amp;rdquo;&lt;sup&gt;2&lt;/sup&gt;&lt;/p&gt;
  73. &lt;p&gt;As suspected, this very invasive rule has drawn lawsuits like honey draws flies.&amp;nbsp; Some preliminary rulings have now begun, and there are three such cases of note. The most recent order was issued on Aug. 15, 2024, by U.S. Federal Judge Timothy J Corrigan&lt;sup&gt;3&lt;/sup&gt;&amp;nbsp;in a Florida case where the plaintiff, the Properties of the Villages Inc., a real estate brokerage firm, alleged that the FTC did not have substantive rulemaking authority over unfair methods of competition and three additional related complaints.&lt;/p&gt;
  74. &lt;p&gt;On July 2, 2024, the plaintiff filed a motion seeking to preliminarily enjoin enforcement of the new rule against it and seeking a stay of the September 4 effective date. While agreeing that the FTC can make some substantive rules, the judge noted that the ban has a &amp;ldquo;huge economic impact&amp;rdquo; and that regulation of noncompete clauses has historically been reserved to state governments. The judge determined that this case violated the Major Questions Doctrine. With a lengthy explanation of his examination of the law and case law, the judge granted the motion for a preliminary injunction but limited its application to this plaintiff only and noted that it did not apply nationally or to any other plaintiff in any other case.&lt;/p&gt;
  75. &lt;p&gt;Prior to this ruling, a federal judge in Texas also issued a preliminary injunction in a similar case&lt;sup&gt;4,5&lt;/sup&gt;&amp;nbsp;in early July 2024. The judge in that case also concluded that the FTC had exceeded its rulemaking authority, noting that &amp;ldquo;Congress vested the Commission with the power to promulgate substantive rules regarding only unfair or deceptive acts or practices, not unfair methods of competition.&amp;rdquo; This same issue was discussed in the Florida case. It is difficult to see how a noncompete covenant is an unfair method of competition. Notwithstanding the arguments the FTC put forth in both cases, it seems to be a mountain too high to climb to prove that premise.&lt;/p&gt;
  76. &lt;p&gt;In a case later in July, the FTC prevailed in a similar case in Pennsylvania.&lt;sup&gt;6&lt;/sup&gt;&amp;nbsp;In that case, the motion for a preliminary injunction was denied. This potentially sets up a throw down at the Supreme Court with a split in Circuit Court decisions, though the Courts of Appeal has not yet weighed in. Lurking behind all of this is the recent Supreme Court decision in &lt;em&gt;Loper,&lt;/em&gt;&lt;sup&gt;&lt;em&gt;7&lt;/em&gt;&amp;nbsp;&lt;/sup&gt;which overruled the &lt;em&gt;Chevron&lt;/em&gt;&amp;nbsp;deference case and&amp;nbsp;now allows the courts to provide greater scrutiny over federal agencies on questions of their statutory authority.&lt;/p&gt;
  77. &lt;p&gt;In my opinion, this rule banning noncompetes has been an intrusion into the operations of the U.S. economy that is unprecedented. I am hopeful that the Supreme Court will ultimately set aside this disruptive rule. If it is not, it could embolden the FTC and other agencies to meddle in the operations of a free economy in the United States.&lt;/p&gt;
  78. &lt;hr /&gt;
  79. &lt;sup&gt;1&lt;/sup&gt; The rule was to become effective on Sept. 4, 2024.&lt;br /&gt;
  80. &lt;sup&gt;2&lt;/sup&gt; There are separate rules for common&amp;nbsp; workers, i.e., those other than senior executives and senior executives. The focus here is on the other than senior executives referred to as &amp;ldquo;common workers.&amp;rdquo;&amp;nbsp;&lt;br /&gt;
  81. &lt;sup&gt;3&lt;/sup&gt; In the United States District Court Middle District of Florida Jacksonville Division &lt;em&gt;Properties of the Villages, Inc., Plaintiff, vs. Federal Trade Commission, Defendant.&lt;/em&gt; Jacksonville, Florida Case No. 5:24-cv-316-TJC-PRL Aug. 14, 2024.&amp;nbsp;&lt;br /&gt;
  82. &lt;div&gt;&lt;sup&gt;4&lt;/sup&gt; The United States District Court&amp;nbsp; for the Northern District of Texas Dallas Division &lt;em&gt;Ryan LLC, Plaintiff, Chamber of Commerce of the United States of America, Business Roundtable, Texas&amp;nbsp;Association of Business, and Longview Chamber of Commerce, Plaintiff-Intervenors, v. Federal Trade Commission, Defendant.&lt;/em&gt; Civil Action No. 3:24-CV-00986-E M.&lt;br /&gt;
  83. &lt;sup&gt;5&lt;/sup&gt; We covered this event in a blog post in July 2024. &lt;a href="https://www.bvresources.com/blogs/bvwire-news/2024/07/25/the-ftc-has-proposed-banning-most-noncompete-agreements" target="_blank"&gt;&lt;strong&gt;Click here.&lt;/strong&gt;&lt;/a&gt;&lt;br /&gt;
  84. &lt;sup&gt;6&lt;/sup&gt; In the United States District Court for the Eastern District of Pennsylvania &lt;em&gt;ATS Tree Services, LLC, Plaintiff, v. Federal Trade Commission,&lt;/em&gt; &lt;em&gt;Lina M. Khan, in her official capacity as chair of the Federal Trade Commission, Rebecca Kelly Slaughter, Alvaro Bedoya, Andrew N. Ferguson, and Melissa Holyoak, in their official capacities as commissioners of the FTC, Defendants.&lt;/em&gt; Civil Action No. 24-1743.&lt;br /&gt;
  85. &lt;sup&gt;7&lt;/sup&gt; &lt;em&gt;Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce, et al.&lt;/em&gt; certiorari to the United States Court of Appeals for the District of Columbia Circuit&lt;br /&gt;
  86. No. 22-451. Argued Jan. 17, 2024&amp;mdash;Decided June 28, 2024&lt;/div&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:ed30b552-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/08/09/strengthen-your-bv-research-with-the-new-research-and-data-assistant</link><a10:author><a10:name> </a10:name></a10:author><title>Strengthen Your BV Research With the New Research and Data Assistant</title><description>Business Valuation Resources (BVR) is excited to announce the launch of its cutting-edge Research and Data Assistant (RADA), now available to all BVResearch Pro subscribers.</description><pubDate>Fri, 09 Aug 2024 14:58:00 Z</pubDate><a10:content type="text">&lt;p&gt;BVR recently launched a new tool available exclusively to our BVResearch Pro subscribers, the Research and Data Assistant (RADA). This revolutionary new tool enables you to get the answers you need quickly with unparalleled accuracy by effortlessly querying any document in BVResearch Pro. Some key benefits of RADA include:&lt;/p&gt;
  87. &lt;ul&gt;
  88.    &lt;li&gt;&lt;em&gt;Speed and efficiency:&lt;/em&gt;&lt;strong&gt; &lt;/strong&gt;RADA provides instant, precise search results, significantly reducing the time spent sifting through documents;&lt;/li&gt;
  89.    &lt;li&gt;&lt;em&gt;Comprehensive coverage:&lt;/em&gt; Access a vast array of resources within BVResearch Pro, including essential books, in-depth special reports, and detailed webinar transcripts; and&lt;/li&gt;
  90.    &lt;li&gt;&lt;em&gt;User-friendly interface:&lt;/em&gt; Designed for ease of use, RADA makes querying documents straightforward and intuitive, enhancing the overall research experience.&lt;/li&gt;
  91. &lt;/ul&gt;
  92. &lt;p&gt;RADA delivers lightning-fast, concise, and summarized search responses along with precise page references directly from BVResearch Pro&lt;em&gt; &lt;/em&gt;documents. This innovative assistant empowers users to anchor their valuation research findings like never before, ensuring they can access critical information swiftly and accurately.&lt;/p&gt;
  93. &lt;p&gt;Curious about how to best utilize this cutting-edge tool? We&amp;rsquo;ve put together a helpful &lt;a href="https://www.bvresources.com/docs/default-source/help-files/rada-user-guide-7-2024.pdf?sfvrsn=7525deb2_2" target="_blank"&gt;&lt;strong&gt;user guide&lt;/strong&gt; &lt;/a&gt;to enable you to make the most out of RADA. To get started, just login to &lt;a href="https://www.bvresources.com/my-bvr" target="_blank"&gt;&lt;strong&gt;My BVR&lt;/strong&gt;&lt;/a&gt;&amp;nbsp;now and access your BVResearch Pro subscription to begin utilizing this exciting new feature.&lt;/p&gt;
  94. &lt;p&gt;Don&amp;rsquo;t have BVResearch Pro? Then you are missing out on this powerful new tool. You can get &lt;a href="https://www.bvresources.com/products/bvresearch" target="_blank"&gt;&lt;strong&gt;BVResearch Pro here.&lt;/strong&gt;&lt;/a&gt;&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:852fb552-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/08/05/nfl-sunday-ticket-verdict-overturned-rule-702-applies-to-exclude-witnesses</link><a10:author><a10:name> </a10:name></a10:author><title>NFL Sunday Ticket Verdict Overturned—Rule 702 Applies to Exclude Witnesses</title><description>In a surprising decision in the NFL Sunday Ticket class action litigation the Court grants the Defendants’ motion for judgment as a matter of law. The judgment of the Jury after the trial was in favor of the Plaintiffs.</description><pubDate>Mon, 05 Aug 2024 22:02:13 Z</pubDate><a10:content type="text">&lt;p&gt;In a surprising decision in the &lt;em&gt;NFL Sunday Ticket&lt;sup&gt;1&lt;/sup&gt;&lt;/em&gt; class action litigation, the court granted the defendants&amp;rsquo; motion for judgment as a matter of law. The judgment of the jury after the trial was in favor of the plaintiffs&lt;sup&gt;2&lt;/sup&gt; in the amount of $4.7 billion, which could then have been tripled to $14.1 billion.&amp;nbsp;&lt;/p&gt;
  95. &lt;p&gt;The judge in the case, Philip S. Gutierrez, set aside the jury verdict, citing flaws in the testimony of the plaintiffs&amp;rsquo; two damages expert witnesses and, subsequent to the trial and verdict, noting that they would be excluded from testifying. In setting aside the verdict as &amp;ldquo;a matter of law,&amp;rdquo; the judge noted that, &amp;ldquo;[w]ithout the testimonies of Dr. (Daniel) Rascher and Dr. (John) Zona, no reasonable jury could have found class-wide injury or damages.&amp;rdquo;&amp;nbsp;&lt;/p&gt;
  96. &lt;p&gt;As to Rascher, the judge found that his testimony &amp;ldquo;was not the product of sound economic methodology&amp;rdquo; and he did not explain how out-of-market telecasts would have been available on cable and satellite without an additional subscription." As to Zona, the judge noted flaws in his &amp;ldquo;multiple distributor&amp;rdquo; models because it predicted consumers would have paid more if another service besides DirecTV offered Sunday Ticket and there was an unsupported assumption that another distributor&amp;mdash;either cable, satellite, or streaming&amp;mdash;would have been available.&lt;/p&gt;
  97. &lt;p&gt;In addition to the fact that the jury failed to follow the court&amp;rsquo;s instructions in determining its verdict, the real key to granting the defendants&amp;rsquo; motion to set aside the verdict as a matter of law lied in Rule 702, as currently constructed.&lt;sup&gt;3&lt;/sup&gt;&lt;/p&gt;
  98. &lt;p&gt;The changes to the rule, implemented on Dec. 1, 2023, implemented "provisions that strengthen the Judges&amp;rsquo; hand as a gatekeeper." These changes, which BVR has noted in a number of articles and blog posts, including our discussion of the rule changes and their implications,&lt;sup&gt;4&lt;/sup&gt;&amp;nbsp;were in part the reason for the set aside. In my personal opinion, these changes in the rule as applied in this case might also be a reason that the expected appeal to the 9th Circuit (for the second time) might help the set aside of the verdict survive the appeal.&lt;/p&gt;
  99. &lt;p&gt;The intriguing question was why the two witnesses have been excluded &lt;em&gt;after &lt;/em&gt;the trial and after the verdict by the jury. As noted, the judge found that the verdict should be set aside as a result of the jury not following his instructions, but he went to great lengths to build his backup case, which was the fact that the witnesses should have been excluded. The opinion made it clear that the defendants had made &lt;em&gt;Daubert &lt;/em&gt;motions before the trial to have the witnesses excluded, but the court denied those motions against both witnesses.&lt;/p&gt;
  100. &lt;p&gt;So how did that happen? I discussed this situation with Drew Soshnick, noted family law and litigation attorney from Fagre Drinker. We both agree that the cross-examination at trial brought out the flaws the judge noted&amp;nbsp;in granting this post-trial motion. We do not have enough information to know why there was not sufficient evidence, or at least not sufficient evidence proffered, pretrial to surface the deficiencies of the two witnesses. One would assume that depositions and report submissions (if there were such submissions) would have surfaced the flaws.&lt;/p&gt;
  101. &lt;p&gt;Regardless, the judge did note those flaws that were discovered during the trial and used them to remedy the situation. It will be interesting to see what the 9th Circuit does with this appeal.&lt;/p&gt;
  102. &lt;hr /&gt;
  103. &lt;p&gt;&lt;sup&gt;1&lt;/sup&gt;&amp;nbsp;&lt;em&gt;In re: NFL Sunday Ticket Antitrust Litigation&lt;/em&gt;.&lt;br /&gt;
  104. &lt;sup&gt;2&lt;/sup&gt; The class of Sunday Ticket subscribers.&lt;br /&gt;
  105. &lt;sup&gt;3&lt;/sup&gt; As of Dec. 1, 2023, Rule 702 was amended and strengthened.&amp;nbsp;&lt;br /&gt;
  106. &lt;sup&gt;4&lt;/sup&gt;&amp;nbsp;"&lt;a href="https://www.bvresources.com/blogs/business-valuation-law-news/2023/10/23/changes-to-rule-702-federal-rules-of-evidence-now-complete"&gt;Changes to Rule 702 Federal Rules of Evidence Now Complete&lt;/a&gt;," Business Valuation Resources.&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:8349b552-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/07/25/the-ftc-has-proposed-banning-most-noncompete-agreements</link><a10:author><a10:name> </a10:name></a10:author><category>contract</category><title>The FTC Has Proposed Banning Most Noncompete Agreements</title><description>For the supposed purpose of fostering competition in the labor market, the Biden administration’s Federal Trade Commission is proposing to ban most noncompetition agreements.</description><pubDate>Thu, 25 Jul 2024 15:35:00 Z</pubDate><a10:content type="text">&lt;p&gt;For the supposed purpose of fostering competition in the labor market, the Biden administration&amp;rsquo;s Federal Trade Commission is proposing to ban most noncompetition agreements. Restrictions in noncompetes have usually been governed by state laws, and the courts have often looked at them under the lens of reasonableness. But the agreements have helped to protect trade secrets, confidential information, and goodwill from unfair competition by former employees.&lt;/p&gt;
  107. &lt;p&gt;Some states already limit or prohibit some or all noncompetes, but the FTC proposal would go beyond the state laws in some cases. There are some exceptions such as for a selling by a 25% or more owner of a business. California has banned or severely restricted most noncompete agreements, so it serves potentially as a good test market for the FTC proposal.&lt;/p&gt;
  108. &lt;p&gt;Consider Meta&amp;rsquo;s new Twitter clone, Threads. It has already been sued by Twitter and Elon Musk, which claims that it uses Twitter trade secrets, provided presumably by former Twitter employees, for its operating platform. Trade secrets might be protected under other statutes, but the point is made that banning noncompetes creates more hurdles for protecting its business. It will be interesting to see how the Meta/Twitter battle unfolds.&lt;/p&gt;
  109. &lt;p&gt;Generally speaking, the FTC proposal is a &amp;ldquo;bad for businesses&amp;rdquo; proposal. What is bad for business can often be bad for the U.S. economy (but not always). The FTC proposal is likely to receive widespread legal challenges.&amp;nbsp;&amp;nbsp;&lt;/p&gt;
  110. &lt;p&gt;Loss of noncompetes can have a great impact on the value of a business also. Let's say Twitter fails in its legal challenges to Meta&amp;rsquo;s Threads. Some business analysts are already saying that Threads could be a death knell to Twitter. How do you value Twitter if it cannot protect itself from loss of its trade secrets? How do you value any business when its key employees can freely walk across the street tomorrow and set up a competing business? This could be a significant challenge to the valuation profession. Keep an eye on this proposal.&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:1cf4b452-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/07/17/thoughts-from-stacy-collins-on-the-stout-acquisition-of-fra</link><a10:author><a10:name> </a10:name></a10:author><title>Thoughts From Stacy Collins on the Stout Acquisition of FRA</title><description>We recently posted the news that Stout has acquired Financial Research Associates (FRA). Jay Fishman is the founder and leader of FRA, but there are other very talented people in FRA who are also making the move.  </description><pubDate>Wed, 17 Jul 2024 18:40:19 Z</pubDate><a10:content type="text">&lt;p&gt;We recently posted the news that Stout has acquired Financial Research Associates (FRA). Jay Fishman is the founder and leader of FRA, but there are other very talented people in FRA who are also making the move. The most notable of those is Stacy Collins, CPA/ABV/CFF. Stacy has been involved in business valuation and forensic accounting since 1993.&amp;nbsp;&lt;/p&gt;
  111. &lt;p&gt;She has been with Jay Fishman at FRA and its predecessor organization since 1993 also. I have known Stacy for many years and know that she is highly respected in the BV and forensic services community by both valuation and forensic services (FVS) professionals and by attorneys around the country. She is one of the top FVS professionals in the country, in my opinion.&lt;/p&gt;
  112. &lt;p&gt;I had a chance to talk to Stacy shortly after the announcement of FRA&amp;rsquo;s acquisition by Stout to get her thoughts on the merger. Her first thought is that Stout provides resources that have previously not been available to FRA professionals. Stout has about 1,040 people and offers services in six major areas: investment banking; transaction advisory; accounting and reporting; specialty and industry services; valuation advisory; and disputes, claims, and investigations. Stacy is anxious to have the resources of data and the experiences of the professionals in all those areas to assist in her knowledge base and broaden the horizons of the FRA people.&lt;/p&gt;
  113. &lt;p&gt;Continuing that theme, Stacy noted the deep bench and wide range of financial consulting, investment banking, and other expertise that they can call on over a wide geographic expanse. She also noted that Stout offers proprietary AI modeling, which is almost becoming a necessity in today&amp;rsquo;s market.&lt;/p&gt;
  114. &lt;p&gt;As it relates to the transaction itself, Stacy said that they were not seeking a merger but were approached by Stout and, the more they looked at the opportunity, the more they liked what they saw. Stacy is looking forward to the new opportunities offered to her and her fellow FRA professionals.&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:09eab452-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/07/16/stout-acquires-financial-research-associates-inc</link><a10:author><a10:name> </a10:name></a10:author><title>Stout Acquires Financial Research Associates Inc. </title><description>Stout has acquired Financial Research Associates Inc. (FRA) for its Valuation Advisory Group.</description><pubDate>Tue, 16 Jul 2024 14:37:58 Z</pubDate><a10:content type="text">&lt;p&gt;Stout has acquired Financial Research Associates Inc. (FRA) for its Valuation Advisory Group. Jay Fishman, FRA&amp;rsquo;s founder, noted that &amp;ldquo;[w]e are excited to join Stout and leverage its extensive resources and global reach. This union will allow us to offer our clients enhanced capabilities, deeper industry insights, and access to a broader range of advisory services.&amp;rdquo;&lt;/p&gt;
  115. &lt;p&gt;Jay is one of the pillars of the profession, having spent 50 years in the business valuation profession, collecting numerous awards and accolades along the way. I, personally, am glad to see that Jay will continue to be active in the BV profession and make his many contributions to the profession.&lt;/p&gt;
  116. &lt;p&gt;Congratulations to Jay and his talented staff as well at Stout.&amp;nbsp;They will make a good team.&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:62c4b352-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/05/29/ai-update-slowing-down-ai-the-internet-is-too-small</link><a10:author><a10:name> </a10:name></a10:author><title>AI Update: Slowing Down AI—The Internet Is Too Small</title><description>Is the AI gold rush slowing down?</description><pubDate>Wed, 29 May 2024 20:48:00 Z</pubDate><a10:content type="text">&lt;p&gt;As I have reported, AI has been on a rampage of growth so fast it is hard to keep up with it. But now comes word that its growth might be slowing due to a completely unexpected source&amp;mdash;at least to me. Apparently the internet is too small.&lt;sup&gt;1&lt;/sup&gt; Who would have guessed that?&lt;/p&gt;
  117. &lt;p&gt;The newer more powerful programs require larger quantities of information to learn from. And here I thought the internet was the encyclopedia of everything! Not really, but I certainly did not think it would be a well run dry for AI. But then, the more I thought about it, there are telltale signs that this might be happening.&lt;/p&gt;
  118. &lt;p&gt;We have reported on the fact that only public information is reachable by these AI programs. It cannot go behind pay walls. And, as we also reported, companies are becoming more sensitive about information that is reachable by the AI machines. As we noted in our last AI post, the &lt;em&gt;New York Times&lt;/em&gt; has sued Microsoft and OpenAI for theft of its proprietary information.&lt;sup&gt;2&lt;/sup&gt; That could lead to more restrictions.&lt;/p&gt;
  119. &lt;p&gt;But, according to the &lt;em&gt;WSJ&lt;/em&gt; article cited below, &amp;ldquo;[m]ost of the data available online is useless for AI training because it contains flaws such as sentence fragments or doesn&amp;rsquo;t add to a model&amp;rsquo;s knowledge.&amp;rdquo;&lt;sup&gt;3&lt;/sup&gt; These AI &amp;ldquo;machines&amp;rdquo; are gaining in knowledge and abilities. It is exciting to watch this all happen. It is truly uncharted territory. Stay tuned for more in the future.&lt;/p&gt;
  120. &lt;hr /&gt;
  121. &lt;sup&gt;1&lt;/sup&gt;&amp;nbsp;Deepa Seetharaman, "For Data-Guzzling AI Companies, The Internet Is Too Small," April 1, 2024; &lt;a href="http://www.wsj.com/tech/ai/ai-training-data-synthetic-openai-anthropic-9230f8d8?mod=dhjem10point"&gt;wsj.com/tech/ai/ai-training-data-synthetic-openai-anthropic-9230f8d8?mod=dhjem10point&lt;/a&gt;.&lt;br /&gt;
  122. &lt;sup&gt;2&lt;/sup&gt;&amp;nbsp;See &lt;em&gt;The New York Times Company Civil Action No. ________ Complaint Jury Trial Demanded Plaintiff, v. Microsoft Corporation, OpenAI, INC., OpenAI LP, OpenAI GP, LLC, OpenAI, LLC, OpenAI OpCo LLC, OpenAI Global LLC, OAI Corporation, LLC, and OpenAI Holdings, LLC, Defendants;&lt;/em&gt; United States District Court Southern District of New York; Filed Dec. 27, 2023.&amp;nbsp;&lt;br /&gt;
  123. &lt;sup&gt;3&lt;/sup&gt;&amp;nbsp;See Note 1. The author suggests that you read the full &lt;em&gt;WSJ&lt;/em&gt; article for more context.</a10:content></item><item><guid isPermaLink="false">urn:uuid:cdbeb352-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/05/08/volunteering-to-help-grow-the-business-valuation-profession</link><a10:author><a10:name> </a10:name></a10:author><title>Volunteering to Help Grow the Business Valuation Profession </title><description>You have heard and read a lot recently about the staffing issues the business valuation profession faces. Where are the people who will lead and staff the profession in the future going to come from? </description><pubDate>Wed, 08 May 2024 19:44:00 Z</pubDate><a10:content type="text">&lt;p&gt;You have heard and read a lot recently about the staffing issues the business valuation profession faces. Where are the people who will lead and staff the profession in the future going to come from? There are many causes of the shortage of people, but one that too often gets overlooked is the shortage of training opportunities for young and inexperienced people coming into the profession. While there are some great organizations that help fill that gap, for example, our own Business Valuation Resources, those organizations can only provide these opportunities if experienced professionals are willing to provide their expertise to train others who are just coming into the profession.&lt;/p&gt;
  124. &lt;p&gt;I started in this business in 1980 during the nascent days of business valuation as a profession. The BV professionals who formed the core of the profession were always there to help each other and to give of their time&amp;nbsp;generously to others who were seeking to enhance their own skills or who were just coming into the profession. These professionals (you would recognize most if not all of their names) are getting a little long in the tooth as am I. Their volunteer efforts need to be replaced, and that can only happen if the current cadre of BV professionals who are younger also step up to the plate.&lt;/p&gt;
  125. &lt;p&gt;It is sometimes difficult to &amp;ldquo;break into,&amp;rdquo; for example, speaking opportunities. There was a period of time where the &amp;ldquo;big names&amp;rdquo; were dominating the speaking opportunities. That is not true any longer. I know that, at BVR, we are always looking for speakers and for topics.&lt;/p&gt;
  126. &lt;p&gt;But speaking is only one way to provide your knowledge and experience to the profession. Some BV organizations have mentoring programs. But, outside of a formal mentoring program, it helps if the experienced BV professionals let it be known that they are available to provide assistance to others in the profession.&amp;nbsp;I have always been generous with my time to other professionals. As recently as last week, I consulted with another professional on an issue on which he was working. I spent probably 30 minutes with him and did not ask for nor expect compensation for my time. I know that many of the BV professionals who are my peers do the same often.&lt;/p&gt;
  127. &lt;p&gt;I would hope that some of the younger BV professionals would do the same and offer to help their fellow professionals whether upcoming or experienced. It is through these volunteers that we can make the BV profession more enticing to new professionals. A closed society is not good for growth. I am sure many of you will heed the call.&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:6400b452-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/04/17/valuation-experts-make-the-first-forbes-top-200-cpas-list</link><a10:author><a10:name> </a10:name></a10:author><title>Valuation Experts Make the First Forbes Top 200 CPAs List</title><description>The Forbes top 200 CPAs list is out. Let's take a look at which valuators made the list.</description><pubDate>Wed, 17 Apr 2024 14:38:28 Z</pubDate><a10:content type="text">&lt;p&gt;The &lt;a href="https://www.forbes.com/lists/top-cpas/?sh=5ffdf15a628e"&gt;&lt;strong&gt;inaugural &lt;em&gt;Forbes&lt;/em&gt; Top 200 CPAs list&lt;/strong&gt;&lt;/a&gt; includes several practitioners who are credentialed in business valuation (ABV, CVA, or ASA). They are: &lt;/p&gt;
  128. &lt;ul&gt;
  129.    &lt;li&gt;&lt;strong&gt;Vic Alexander, CPA, ABV, CFF,&lt;/strong&gt; is chief manager, KraftCPAs (Nashville, Tenn.);&lt;/li&gt;
  130.    &lt;li&gt;&lt;strong&gt;Tony Argiz, ASA, ABV, CPA, CFF, CFE, CGMA,&lt;/strong&gt; managing principal, South Florida, BDO USA (Miami);&lt;/li&gt;
  131.    &lt;li&gt;&lt;strong&gt;Larry Autrey, CPA, ABV,&lt;/strong&gt; managing partner, Whitley Penn (Fort Worth, Texas);&lt;/li&gt;
  132.    &lt;li&gt;&lt;strong&gt;Shelly Bedford, CPA, MST, CVA,&lt;/strong&gt; managing partner, Dennis, Gartland &amp;amp; Niergarth (Traverse City, Mich.);&lt;/li&gt;
  133.    &lt;li&gt;&lt;strong&gt;Allen Carroll, CPA, ABV, CFF, CVA,&lt;/strong&gt; partner, Wilkins Miller (Mobile, Ala.);&lt;/li&gt;
  134.    &lt;li&gt;&lt;strong&gt;Richard Craig, CPA, ABV, CFF, CVA, MAFF, CITP, MCP,&lt;/strong&gt; managing partner, 415 Group (Canton, Ohio);&lt;/li&gt;
  135.    &lt;li&gt;&lt;strong&gt;Brian Lang, CPA, CVA, CEPA,&lt;/strong&gt; CEO, SSC CPAs (Topeka, Kan.);&lt;/li&gt;
  136.    &lt;li&gt;&lt;strong&gt;Karen Lascelle, CPA, CVA, CFE,&lt;/strong&gt; managing director, John G. Burk &amp;amp; Associates, CPAs (Keene, N.H.);&lt;/li&gt;
  137.    &lt;li&gt;&lt;strong&gt;Harold Martin, CPA, ABV, CFF, ASA, CFE,&lt;/strong&gt; director, Keiter CPA (Glen Allen, Va.);&lt;/li&gt;
  138.    &lt;li&gt;&lt;strong&gt;Mike McCarthy, CPA, CVA,&lt;/strong&gt; managing partner, Hancock Askew (Savannah, Ga.);&lt;/li&gt;
  139.    &lt;li&gt;&lt;strong&gt;Edward Mendlowitz, CPA, ABV,&lt;/strong&gt; partner, Withum (East Brunswick, N.J.);&lt;/li&gt;
  140.    &lt;li&gt;&lt;strong&gt;Stacey Udell, CPA, ABV, CFF, CVA,&lt;/strong&gt; principal, HBK CPAs &amp;amp; Consultants (Cherry Hill, N.J.);&lt;/li&gt;
  141.    &lt;li&gt;&lt;strong&gt;Joel Valentine, CPA, CVA, CM&amp;amp;AA, CGMA,&lt;/strong&gt; CEO, Wessel (Johnstown-Somerset, Pa.);&lt;/li&gt;
  142.    &lt;li&gt;&lt;strong&gt;Lance Weiss, CPA, CVA,&lt;/strong&gt; owner, SFW Partners (St. Louis);&lt;/li&gt;
  143.    &lt;li&gt;&lt;strong&gt;Kevin Yeanoplos, CPA, ABV, CFF, ASA, &lt;/strong&gt;shareholder/director, Brueggeman &amp;amp; Johnson Yeanoplos (Tucson, Ariz.); and&lt;/li&gt;
  144.    &lt;li&gt;&lt;strong&gt;Bruce Zicari, CPA, CVA, &lt;/strong&gt;CEO, The Bonadio Group (Rochester, N.Y.).&lt;/li&gt;
  145. &lt;/ul&gt;
  146. &lt;p&gt;BVR is pleased that several of its editorial board members, Harold Martin and Kevin Yeanoplos, made the list. Also, Stacey Udell will be doing a &lt;a href="https://sub.bvresources.com/TrainingEvent.asp?WebinarID=1834"&gt;webinar for BVR on cannabis valuations&lt;/a&gt; on April 18. &lt;/p&gt;
  147. &lt;p&gt;&lt;strong&gt;Common thread:&lt;/strong&gt; In addition to their obvious technical skills, all these professionals have given back to the community and the profession in some way. They serve on committees and boards at various local groups as well as accounting and valuation professional organizations. Other efforts include speaking at conferences and on webinars, writing books and articles, and teaching (some are adjunct professors). These endeavors are crucial in advancing the valuation profession. &lt;/p&gt;
  148. &lt;p&gt;BVR congratulates all the professionals who made the &lt;em&gt;Forbes&lt;/em&gt; list!&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:87beb352-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/04/10/tax-planning-with-rcreports</link><a10:author><a10:name> </a10:name></a10:author><title>Tax Planning With RCReports</title><description>Tax planning is an essential aspect of financial management for businesses and individuals. However, with a complex and ever-changing tax landscape, it can be challenging to navigate these waters effectively, which is where RCReports can be a game-changer.</description><pubDate>Wed, 10 Apr 2024 14:42:18 Z</pubDate><a10:content type="text">&lt;p&gt;&lt;em&gt;This blog was originally published on &lt;/em&gt;&lt;a href="https://rcreports.com/blog/the-role-of-rcreports-in-tax-planning-tools-and-strategies-for-success/" target="_blank"&gt;&lt;strong&gt;&lt;em&gt;RCReport's blog on Jan. 16, 202&lt;/em&gt;&lt;/strong&gt;&lt;/a&gt;&lt;strong&gt;&lt;em&gt;4&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;
  149. &lt;p&gt;Tax planning is an essential aspect of financial management for businesses and individuals. Properly managing your tax obligations can lead to significant savings and financial security. However, with a complex and ever-changing tax landscape, it can be challenging to navigate these waters effectively. This is where tools like RCReports come into play, providing valuable assistance and support in your tax planning journey.&amp;nbsp;&lt;/p&gt;
  150. &lt;p&gt;In this blog post, we&amp;rsquo;ll explore the role of RCReports in tax planning, the tools it offers, and the strategies you can employ for tax planning success.&amp;nbsp;&lt;/p&gt;
  151. &lt;h4&gt;Understanding RCReports&amp;nbsp;&lt;/h4&gt;
  152. &lt;p&gt;RCReports is a specialized software tool designed to assist tax professionals, accountants, and business owners in determining reasonable compensation for S corporation shareholders and guiding entity selection. Reasonable compensation, in this context, refers to the appropriate salary or wage that business owners should receive for their services within the company. Failing to establish reasonable compensation can lead to potential tax issues, such as IRS audits.&amp;nbsp;&lt;/p&gt;
  153. &lt;p&gt;&lt;span style="font-weight: 700; font-family: Montserrat, Arial, sans-serif; font-size: 18px; color: #333333;"&gt;The Key Features of RCReports&amp;nbsp;&lt;/span&gt;&lt;/p&gt;
  154. &lt;p&gt;RCReports offers several key features that make it a valuable tool in tax planning:&amp;nbsp;&lt;/p&gt;
  155. &lt;ol&gt;
  156.    &lt;li&gt;&lt;em&gt;Reasonable compensation studie&lt;/em&gt;&lt;em&gt;s:&lt;/em&gt; The software conducts detailed surveys to assess the tasks, time allocation, and proficiency of shareholder employees. By gathering this information, it helps in determining the appropriate salary amount, minimizing the risk of IRS-related concerns.&amp;nbsp;&lt;/li&gt;
  157.    &lt;li&gt;&lt;em&gt;Entity planner:&lt;/em&gt; RCReports provides an entity planner tool, which enables tax professionals to run various scenarios for entity selection. This aids in understanding the tax implications and compliance requirements for different business structures, including sole proprietorships, partnerships, LLCs, and S corporations.&amp;nbsp;&lt;/li&gt;
  158.    &lt;li&gt;&lt;em&gt;Data sets and comprehensive wage data:&lt;/em&gt;&lt;strong&gt; &lt;/strong&gt;Users have access to a robust data set, including comprehensive wage data. These data can be instrumental in making informed decisions about entity selection and reasonable compensation calculations.&amp;nbsp;&lt;/li&gt;
  159.    &lt;li&gt;&lt;em&gt;Detailed reports:&lt;/em&gt; The software generates detailed reports that outline the methodology used, the recommended salary amount, and other essential information. These reports are vital for record-keeping and supporting tax-related decisions in case of IRS audits or inquiries.&amp;nbsp;&lt;/li&gt;
  160. &lt;/ol&gt;
  161. &lt;h4&gt;Tax Planning Strategies With RCReports&amp;nbsp;&lt;/h4&gt;
  162. &lt;p&gt;Now that we understand the capabilities of RCReports, let&amp;rsquo;s explore how it can be effectively employed in tax planning:&amp;nbsp;&lt;/p&gt;
  163. &lt;ol&gt;
  164.    &lt;li&gt;&lt;em&gt;Reasonable compensation analysis:&lt;/em&gt; The first and foremost use of RCReports is to perform reasonable compensation studies for S corporation shareholders. This process ensures that business owners receive an appropriate salary, avoiding potential IRS disputes.&amp;nbsp;&lt;/li&gt;
  165.    &lt;li&gt;&lt;em&gt;Entity selection guidance:&lt;/em&gt; RCReports&amp;rsquo; entity planner allows for the comparison of various pass-through entity types and their tax implications. This helps in making informed decisions about the most suitable business structure for your needs.&amp;nbsp;&lt;/li&gt;
  166.    &lt;li&gt;&lt;em&gt;State and federal tax compliance:&lt;/em&gt; By using RCReports, tax professionals can help businesses ensure compliance with both state and federal tax regulations. It minimizes the risk of audits, penalties, and other tax-related issues.&amp;nbsp;&lt;/li&gt;
  167.    &lt;li&gt;&lt;em&gt;Tax savings and optimization:&lt;/em&gt; The comprehensive wage data available in RCReports assist in optimizing tax savings. For instance, knowing the reasonable compensation amount can determine the right mix of salary and distributions for S corporation shareholders, potentially reducing tax liabilities.&amp;nbsp;&lt;/li&gt;
  168.    &lt;li&gt;&lt;em&gt;Advanced tax planning:&lt;/em&gt; RCReports facilitates advanced tax planning strategies, such as optimizing Section 199A deductions and tax-free fringe benefits. These strategies can lead to significant tax savings for businesses and their owners.&amp;nbsp;&lt;/li&gt;
  169.    &lt;li&gt;&lt;em&gt;Scenario analysis:&lt;/em&gt; The software allows for scenario analysis, enabling tax professionals to run multiple entity and compensation scenarios. This capability is especially valuable when clients have unique circumstances or financial goals.&amp;nbsp;&lt;/li&gt;
  170. &lt;/ol&gt;
  171. &lt;h4&gt;The Value of RCReports in Tax Planning&amp;nbsp;&lt;/h4&gt;
  172. &lt;p&gt;In today&amp;rsquo;s ever-evolving tax landscape, the importance of accurate and compliant tax planning cannot be overstated. Businesses and individuals alike benefit from employing tools like RCReports to ensure that their tax strategies align with their financial goals while adhering to legal requirements.&amp;nbsp;&lt;/p&gt;
  173. &lt;p&gt;The ability to establish reasonable compensation, select the most suitable business entity, and leverage advanced tax planning strategies are all made more accessible and efficient with RCReports. By doing so, you can not only achieve tax savings, but also secure your financial future.&amp;nbsp;&lt;/p&gt;
  174. &lt;p&gt;Tax professionals find RCReports to be an indispensable asset in their practice. It streamlines the process of determining reasonable compensation, eases entity selection decisions, and enhances overall tax planning capabilities. This, in turn, allows tax professionals to provide greater value to their clients and safeguard them against potential tax-related complications.&amp;nbsp;&lt;/p&gt;
  175. &lt;p&gt;In conclusion, RCReports is more than just a software tool; it&amp;rsquo;s a key enabler of tax planning success. By leveraging its features and capabilities, individuals and businesses can navigate the complexities of the tax system with confidence, optimizing their tax strategies and securing their financial well-being.&amp;nbsp;&lt;/p&gt;
  176. &lt;h4&gt;&lt;a href="https://www.bvresources.com/products/demo-request/rcreports"&gt;Request A Demo Now &amp;gt;&amp;gt;&lt;/a&gt;&lt;/h4&gt;
  177. &lt;p&gt;&amp;nbsp;&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:7eb6b352-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/04/04/is-cpa-mobility-in-jeopardy</link><a10:author><a10:name> </a10:name></a10:author><title>Is CPA Mobility In Jeopardy?</title><description>On Dec. 14, 2023, the Journal of Accountancy published an article titled "AICPA Issues Guidance on Potential Mobility Changes." The article caught my eye immediately.</description><pubDate>Thu, 04 Apr 2024 14:47:39 Z</pubDate><a10:content type="text">&lt;p&gt;On Dec. 14, 2023, the &lt;em&gt;Journal of Accountancy&lt;/em&gt; published an article titled "AICPA Issues Guidance on Potential Mobility Changes."&lt;sup&gt;1&lt;/sup&gt;&amp;nbsp;The article caught my eye immediately. I flashed back to years past when CPA expert witnesses always had to be aware of whether or not they could &amp;ldquo;practice&amp;rdquo; as a CPA in a state where they were not licensed without obtaining a temporary license. I have been a CPA since 1969, 54 years, and a testifying witness since 1980. Even as late as the 1980s, some states still did not have full mobility.&amp;nbsp;&lt;/p&gt;
  178. &lt;p&gt;Marta Zaniewski, vice president, AICPA State Regulatory and Legislative Affairs, and her colleague, James Cox, graciously allowed me to discuss this perhaps burgeoning issue with them. Some states are considering legislation that might change the requirements to become a CPA in that state. Apparently most of the currently considered changes would modify or lessen the current requirements (see below).&lt;/p&gt;
  179. &lt;p&gt;According to the article, &amp;ldquo;CPAs in good standing with their state boards of accountancy presently benefit from practice mobility&amp;mdash;a licensing system that allows CPAs to practice across state lines without having to acquire an additional license.&amp;rdquo; Mobility is currently guided by the concept of &amp;ldquo;substantial equivalency.&amp;rdquo; The concept is outlined in the article as follows:&lt;/p&gt;
  180. &lt;p style="margin-left: 40px;"&gt;Currently, to meet substantial equivalency standards, CPAs typically must have completed 150 credit hours of undergraduate or graduate-level studies, successfully passed the Uniform CPA Exam, and have accrued at least one year of relevant experience. CPAs who meet the standards for education, exams, and experience can practice both in person and virtually outside of the state in which they are licensed.&lt;sup&gt;2&lt;/sup&gt;&lt;/p&gt;
  181. &lt;p&gt;The mobility issue could become serious if a person is licensed as a CPA in a state&amp;nbsp; under rules that are less than the current &amp;ldquo;substantial equivalency&amp;rdquo; requirements, noted above. Most other states have more stringent requirements for a person licensed as a CPA who currently wants to practice in those states. So, in the near term, this issue might be a problem for newer CPAs. However, if more states diverge from the current rules, it could become a more widespread issue for valuation and litigation experts. It might revert to the old rules where, as experts, we had always to be aware of whether we needed a license to practice as a CPA in a state other than our state of residence and licensure. I remember having to obtain a temporary license in a couple of instances in order to testify.&lt;/p&gt;
  182. &lt;p&gt;Let us hope that &amp;ldquo;substantial equivalency&amp;rdquo; does not become a thing of the past. I would urge you all to stay aware of any proposed legislation regarding CPA licensure in your state and make it known to the legislators what the issue is if &amp;ldquo;substantial equivalency&amp;rdquo; goes away. I am not suggesting you oppose a legislative change to the CPA rules but that you emphasize the need to keep mobility not only for your state&amp;rsquo;s CPAs, but also for CPAs from other states doing business in your state. For valuation purposes, it is more than just if you are testifying in a matter. My understanding is that &amp;ldquo;virtual&amp;rdquo; practice would also be covered if you are engaged to prepare a valuation in another state even though you never leave your home state to perform the work. If you are putting yourself out as a CPA, then you technically would need to be licensed in that other state in order to perform the work as a CPA. If you performed the engagement and failed to get a license and the valuation became involved in some controversy or litigation, it could be detrimental to your defense if you failed to get a license in that other state.&lt;/p&gt;
  183. &lt;p&gt;To help CPAs with mobility issues that might arise, the AICPA has developed a website (&lt;a href="https://www.aicpa-cima.com/news/landing/protecting-cpa-mobility" target="_blank"&gt;aicpa-cima.com/news/landing/protecting-cpa-mobility&lt;/a&gt;) that explains further this issue and will be updated to keep you informed on issues that might arise regarding mobility.&lt;/p&gt;
  184. &lt;p&gt;If you have any questions or comments on this article, please contact me at info@bvresources.com.&amp;nbsp;&lt;/p&gt;
  185. &lt;hr /&gt;
  186. &lt;sup&gt;1&lt;/sup&gt;&amp;nbsp;Mari Sagedal, "AICPA Issues Guidance on Potential Mobility Changes," &lt;em&gt;Journal of Accounting,&lt;/em&gt; Association of International Certified Professional Accountants, Dec. 14, 2023.&lt;br /&gt;
  187. &lt;sup&gt;2&lt;/sup&gt;&amp;nbsp;It is my understanding that current mobility allows licensed CPAs from a state to meet the &amp;ldquo;substantial equivalency&amp;rdquo; test as long as they met the requirements of their state on the date at which they were granted a license in that state.</a10:content></item><item><guid isPermaLink="false">urn:uuid:1074b352-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/03/12/update-on-ai</link><a10:author><a10:name> </a10:name></a10:author><title>Update on AI</title><description>The issues regarding the shake up at OpenAI settled down, seemingly, as quickly as they fired up. The parent not-for-profit governing organization replaced most or all of its board of directors, but it remains to be seen what structural changes will ultimately result from shake up.</description><pubDate>Tue, 12 Mar 2024 14:29:26 Z</pubDate><a10:content type="text">&lt;p&gt;The issues regarding the shake up at OpenAI settled down, seemingly, as quickly as they fired up. The parent not-for-profit governing organization replaced most or all of its board of directors, but it remains to be seen what structural changes will ultimately result from the shake-up. For now, things seem to be quiet on the OpenAI front from an internal standpoint. The same cannot be said for outside events impacting OpenAI as we will see.&lt;/p&gt;
  188. &lt;p&gt;That cannot be said for AI as a whole. There are so many things going on that it is next to impossible even to gather them all together, let alone make any cohesive sense of them. I do my best to keep track of them and will try to use these blog posts going forward to focus on a particular AI activity or event that is of particular interest to our blog readers.&lt;/p&gt;
  189. &lt;p&gt;Keeping that in mind, this post will focus on litigation regarding AI. Specifically, the &lt;em&gt;New York Times&lt;/em&gt; has filed suit against Microsoft and OpenAI alleging copyright infringement. Three paragraphs from the complaint&lt;sup&gt;1&lt;/sup&gt;&amp;nbsp;the &lt;em&gt;Times&lt;/em&gt;&amp;nbsp;filed provide a summary of the issues in the case:&lt;/p&gt;
  190. &lt;p style="margin-left: 40px;"&gt;The Times objected after it discovered that Defendants were using Times content without permission to develop their models and tools. For months, The Times has attempted to reach a negotiated agreement with Defendants, in accordance with its history of working productively with large technology platforms to permit the use of its content in new digital products (including the news products developed by Google, Meta, and Apple). The Times&amp;rsquo;s goal during these negotiations was to ensure it received fair value for the use of its content, facilitate the continuation of a healthy news ecosystem, and help&amp;nbsp;develop GenAI technology in a responsible way that benefits society and supports a well-informed public.&lt;/p&gt;
  191. &lt;p style="margin-left: 40px;"&gt;These negotiations have not led to a resolution. Publicly, Defendants insist that their conduct is protected as &amp;ldquo;fair use&amp;rdquo; because their unlicensed use of copyrighted content to train GenAI models serves a new &amp;ldquo;transformative&amp;rdquo; purpose. But there is nothing &amp;ldquo;transformative&amp;rdquo; about using The Times&amp;rsquo;s content without payment to create products that substitute for The Times and steal audiences away from it. Because the outputs of Defendants&amp;rsquo; GenAI models compete with and closely mimic the inputs used to train them, copying Times works for that purpose is not fair use.&lt;/p&gt;
  192. &lt;p style="margin-left: 40px;"&gt;The law does not permit the kind of systematic and competitive infringement that Defendants have committed. This action seeks to hold them responsible for the billions of dollars in statutory and actual damages that they owe for the unlawful copying and use of The Times&amp;rsquo;s uniquely valuable works.&lt;/p&gt;
  193. &lt;p&gt;BV Resources Chief Content Officer, Elizabeth Petersen, who has 20 years of experience in the publishing industry, gave her thoughts on the matter: &amp;ldquo;Artificial intelligence will certainly change how we parse, analyze, and consume information. But the question of copyright, intellectual property, and content ownership is a significant one and will require new legal precedence. In my mind, &amp;lsquo;transformation&amp;rsquo; of content shouldn&amp;rsquo;t automatically grant fair use, and far more work needs to be done to protect intellectual property. But we may be in for a new definition of content ownership and creation.&amp;rdquo;&lt;/p&gt;
  194. &lt;p&gt;This case will be a landmark case relative to what AI can and cannot use. We have stated previously that tools such as ChatGPT cannot go behind pay walls. I reviewed the 69-page complaint briefly. It did not seem to talk about pay walls at all but emphasizes that the defendants collected volumes of data from the &lt;em&gt;New York Times&lt;/em&gt; website. I went on that website and found that, while one might be able to get some articles for free, they are limited, and then you have to subscribe. I did not see any indication in the complaint that the defendants subscribed and then copied subscribed information in its memory banks. So we will see as the case progresses what the reality is.&lt;/p&gt;
  195. &lt;p&gt;As Elizabeth Petersen noted above, &amp;ldquo;we may be in for a new definition of content ownership and creation.&amp;rdquo; Stay tuned.&lt;/p&gt;
  196. &lt;hr /&gt;
  197. &lt;sup&gt;1&amp;nbsp;&lt;/sup&gt;&lt;em&gt;The New York Times Company Civil Action No. ________ Complaint Jury Trial Demanded Plaintiff v. Microsoft Corporation, OpenAI, INC., OpenAI LP, OpenAI GP, LLC, OpenAI, LLC, OpenAI OPCO LLC, OpenAI Global LLC, OAI Corporation, LLC, and OpenAI Holdings, LLC, Defendants;&lt;/em&gt; United States District Court Southern District of New York; Filed Dec. 27, 2023.</a10:content></item><item><guid isPermaLink="false">urn:uuid:d227b352-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/02/23/how-ccpro-enhances-your-valuation-reports</link><a10:author><a10:name> </a10:name></a10:author><category>cost of capital</category><title>How CCPro Enhances Your Valuation Reports</title><description>Getting accurate cost of equity and WACC estimates and CRSP size premia can be a big job. However, thanks to Cost of Capital Professional, developing your cost of equity estimates has gotten so much more streamlined. Let's take a look at some of the most beneficial features of this cost-effective and easy-to-use platform.</description><pubDate>Fri, 23 Feb 2024 21:18:01 Z</pubDate><a10:content type="text">&lt;p&gt;Getting accurate cost of equity and WACC estimates and CRSP size premia can be a challenging endeavor. However, thanks to Cost of Capital Professional, developing your cost of equity estimates has gotten so much more efficient. Let's take a look at some of the most beneficial features of this cost-effective and easy-to-use platform.&lt;/p&gt;
  198. &lt;p&gt;&lt;b&gt;Thoroughly Vetted Data&amp;mdash;&lt;/b&gt;The CCPRO platform is built on a solid framework with data that are sourced from highly credible information sources such as Aswath Damodaran, Salvidio &amp;amp; Partners, CRSP, and the Federal Reserve. Furthermore, CCPro uses data going back as far as 1928.&amp;nbsp;This enables you to build highly effective analyses that can paint a more vivid picture of market trends over time.&lt;/p&gt;
  199. &lt;p&gt;&lt;strong&gt;Data Transparency&amp;mdash;&lt;/strong&gt;Any claim you make has to be verifiable, and CCPro makes that easy by enabling you to see all the components of your cost of capital calculations including citations for all of the sources that were used in the calculations. Given that Business Valuation Resources is not affiliated with any financial institution, you can be sure that the methodologies and results are independent and objective, as expected by courts, the Internal Revenue Service, and professional standards of practice such as USPAP, IVS, and VS100 (SSVS-1).&lt;/p&gt;
  200. &lt;p&gt;&lt;strong&gt;Save Money&amp;mdash;&lt;/strong&gt;One of the most important elements of CCPro is its affordability: A year-long subscription comes in at just one-third of the price point of other comparable platforms.&amp;nbsp;&lt;/p&gt;
  201. &lt;p&gt;Cost of Capital Professional Is a powerful resource for business valuators and analysts that provides a simple and transparent way to estimate cost of capital at a highly competitive price point, and the best part is that you can give it a try for free! Don't miss out on this practice-enhancing tool!&lt;/p&gt;
  202. &lt;p&gt;&lt;strong style="color: #333333; font-family: Montserrat, Arial, sans-serif;"&gt;&lt;a href="mailto:sales@bvresources.com"&gt;&lt;strong&gt;Sign up for the &lt;/strong&gt;&lt;strong&gt;free trial here&lt;/strong&gt;&lt;/a&gt;.&lt;/strong&gt;&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:62ffb252-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/02/07/preview-business-valuation-update-yearbook-2024-part-2</link><a10:author><a10:name> </a10:name></a10:author><title>Preview: Business Valuation Update Yearbook 2024, Part 2</title><description>With a maxed-out capacity, the ASA New York Fair Value Conference was the place to be for anyone interested in valuation. Get a look behind the curtain at this event!</description><pubDate>Wed, 07 Feb 2024 21:32:50 Z</pubDate><a10:content type="text">&lt;p&gt;The year 2023 was defined by unexpected economic events, new valuation conferences, and more. To kick off a new year, BVR has just released the &lt;em&gt;Business Valuation Update Yearbook, &lt;/em&gt;2024 edition, with 404 pages of the biggest events in valuation from the last year. Enjoy this coverage from the record-breaking ASA New York Fair Value Conference.&lt;/p&gt;
  203. &lt;p&gt;In-person capacity was sold out, and virtual attendance brought the total to about 300 for the ASA Spring Fair Value Conference in New York City May 4&amp;mdash;a new attendance record. Topics included inflation impacts on valuation, audit targets, the new AICPA business combinations guide, ESG, PE valuations, and more. Bill Johnston (Empire Valuation Consultants) gave the welcome remarks and thanked co-sponsor Eisner Amper, in whose offices the conference was held. The first session was the popular panel session of large accounting and valuation firms that is a hallmark of this conference.&lt;/p&gt;
  204. &lt;p&gt;&lt;strong&gt;Big Four perspectives.&lt;/strong&gt; Myron Marcinkowski (Kroll) acted as moderator for a panel that included Josh Putnam (Ernst &amp;amp; Young), Manish Choudhary (Deloitte), Martin Mazin (KPMG), and Adam Smith (PricewaterhouseCoopers). The panel made the following points:&lt;/p&gt;
  205. &lt;ul&gt;
  206.    &lt;li&gt;There have been no major changes to the long-term growth rates being used&amp;mdash;the current economic picture is seen as transitory&amp;mdash;and the general range is 2% to 2.5% (of course, it depends on industry).&lt;/li&gt;
  207.    &lt;li&gt;There is more scrutiny on management forecasts (businesses don&amp;rsquo;t know how to bake inflation into forecasts). One way is to compare performance to market participants&amp;mdash;if all other firms are down, why is your firm up?&lt;/li&gt;
  208.    &lt;li&gt;In the wake of the banking debacle, there was initial panic on the part of auditors, but that went away when the government came to the rescue. Stiffer regs will come as a result but not right away, given the pace of change by Congress.&lt;/li&gt;
  209.    &lt;li&gt;The Big Four are eyeing AI (&amp;ldquo;you can&amp;rsquo;t fight machines&amp;rdquo;), but they must learn how to harness it. They don&amp;rsquo;t see its use in business valuation rising to the level that it has with real estate appraisals.&amp;nbsp;&lt;/li&gt;
  210.    &lt;li&gt;The new AICPA business combination guide will not &amp;ldquo;widely change&amp;rdquo; practice in this area. Guides like this reflect best practices&amp;mdash;they don&amp;rsquo;t establish best practices.&lt;/li&gt;
  211.    &lt;li&gt;Although the Certified in Entity and Intangible Valuations (CEIV) credential will sunset, the Mandatory Performance Framework will endure (a new streamlined version is in the works), and some VPOs will incorporate it into certification training.&lt;/li&gt;
  212.    &lt;li&gt;Expect audit pushback to heat up over valuations of common stock that are way different than prices realized from secondary transactions.&amp;nbsp;&lt;/li&gt;
  213. &lt;/ul&gt;
  214. &lt;p&gt;Most attendees had not heard that the CEIV credential was being discontinued. The CEIV credential was a collaborative effort of the AICPA, ASA, and RICS that began in 2014, and the credential was launched in 2017. The Big Four, as well as smaller firms, embraced the program but stopped short of credentialing their people pending the resolution of several concerns, most importantly the confidentiality of client information. There was also a companion credential, the Certified in the Valuation of Financial Instruments (CVFI), which apparently will also be discontinued.&amp;nbsp;&lt;/p&gt;
  215. &lt;p&gt;Make sure that you are up to date on all the most important valuation events from 2023 with this must-read book. Learn more about this essential read here; while you&amp;rsquo;re at it, make sure that you&amp;rsquo;re up to date on all the most impactful valuation law cases of 2023 by checking out the&amp;nbsp;&lt;em&gt;&lt;a href="https://www.bvresources.com/products/business-valuation-update-yearbook-2024-edition" target="_blank"&gt;&lt;em&gt;&lt;strong&gt;Business Valuation Update Yearbook,&lt;/strong&gt;&lt;/em&gt;&lt;strong&gt;&amp;nbsp;2024&amp;nbsp;&lt;em&gt;edition.&lt;/em&gt;&lt;/strong&gt;&lt;/a&gt;&lt;/em&gt;&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:88cfb252-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/01/19/coe-estimates-from-leading-data-sets-are-all-very-close</link><a10:author><a10:name> </a10:name></a10:author><title>COE Estimates From Leading Data Sets Are All ‘Very Close’</title><description>Find out why the Cost of Equity estimates from so many sources ended up being so similar.</description><pubDate>Fri, 19 Jan 2024 19:35:04 Z</pubDate><a10:content type="text">&lt;div&gt;&amp;ldquo;Kroll, BVResources, and Pepperdine discount rates were very close,&amp;rdquo; writes Jim Hitchner (Financial Valuation Advisors Inc.) after putting the three data sets through their paces in a case study.&lt;sup&gt;1&lt;/sup&gt; They all produced a cost of equity (COE) rate in the range of 18% to 19% for a valuation date of Jan. 1, 2022. Hitchner also used a fourth data set, from Dr. Aswath Damodaran (New York University), in the same case study, and the results were an &amp;ldquo;outlier&amp;rdquo; because the professor adjusts cash flows instead of adjusting the discount rate for size and company-specific risk.&lt;/div&gt;
  216. &lt;p&gt;The results reinforce a similar case study Hitchner did a few years ago, when he used the Kroll (then Duff &amp;amp; Phelps) Navigator and BVR&amp;rsquo;s Cost of Capital Professional for the same valuation and the discount rate output was &amp;ldquo;not that much different,&amp;rdquo; he said at the time.&lt;sup&gt;2&lt;/sup&gt; Hitchner is a veteran valuation expert, thought leader in the profession, and author of one of the seminal valuation texts, &lt;em&gt;Financial Valuation Applications and Models.&lt;sup&gt;3&lt;/sup&gt;&lt;/em&gt;&lt;/p&gt;
  217. &lt;p&gt;&lt;strong&gt;Survey of usage.&lt;/strong&gt; At the Virginia Society of CPAs&amp;rsquo; Forensic and Valuation Conference this past September, Hitchner presented the results of a survey he conducted in July 2022 that asked about the data sets practitioners use. The question was: What cost of equity data do you currently use? (pick all that apply)&lt;/p&gt;
  218. &lt;ol&gt;
  219.    &lt;li&gt;Kroll Navigator&amp;mdash;79%;&lt;/li&gt;
  220.    &lt;li&gt;BVResources COC Pro&amp;mdash;23%;&lt;/li&gt;
  221.    &lt;li&gt;Damodaran&amp;rsquo;s data and analyses&amp;mdash;18%;&lt;/li&gt;
  222.    &lt;li&gt;Pepperdine survey data&amp;mdash;11%; and&lt;/li&gt;
  223.    &lt;li&gt;Other or none of the above&amp;mdash;9%&lt;/li&gt;
  224. &lt;/ol&gt;
  225. &lt;p&gt;A little bit of background here. Both the Kroll Navigator and BVR&amp;rsquo;s Cost of Capital Professional are Web-based applications designed to help estimate the cost of capital of private firms. The Navigator launched in early 2018 and was the result of the transitioning of the then Duff &amp;amp; Phelps &lt;em&gt;Valuation Handbook&lt;/em&gt; series from print to an interactive online application. The Navigator has a massive amount of data, methodologies, and output, and Kroll has stated that using it is just like having its cost of capital experts &amp;ldquo;sitting right at your side.&amp;rdquo;&lt;sup&gt;4&lt;/sup&gt;&lt;/p&gt;
  226. &lt;p&gt;BVR&amp;rsquo;s Cost of Capital Professional launched in late 2018 as a simple, less costly, independent alternative designed to enhance professional judgment, flexibility, and common sense in a process that is in danger of becoming a complex &amp;ldquo;black box&amp;rdquo; of applied mathematics. The platform integrates data from multiple sources, including the University of Chicago&amp;rsquo;s Center for Research in Security Prices (CRSP) database, Damodaran&amp;rsquo;s data library, and the U.S. Federal Reserve. The platform has certain default options, but users have the freedom to decide whether to use those options.&lt;sup&gt;5&lt;/sup&gt; Damodaran&amp;rsquo;s website provides (free of charge) an extensive amount of free data on risk-free rates, equity risk premiums (ERPs), corporate default spreads, corporate tax rates, country risk premiums, and more. He uses an &amp;ldquo;implied&amp;rdquo; ERP, a forward-looking method as opposed to the &amp;ldquo;historical&amp;rdquo; ERP. He calculates the implied ERP by backing it out from the current market prices and expected future cash flows, which gives an internal rate of return for equities that is analogous to the yield to maturity on a bond.&lt;sup&gt;6&lt;/sup&gt;&lt;/p&gt;
  227. &lt;p&gt;The Pepperdine survey is an ongoing project at the Pepperdine University Graziadio Business School that conducts an annual survey of expected rates of return with respect to private companies. Respondents include senior lenders, asset-based lenders, mezzanine funds, private equity groups, venture capital firms, angel investors, privately held businesses, investment bankers, business brokers, limited partners, and business appraisers.&lt;sup&gt;7&lt;/sup&gt;&lt;/p&gt;
  228. &lt;p&gt;&lt;strong&gt;Case study results.&lt;/strong&gt; In Hitchner&amp;rsquo;s case study, the Kroll calculations resulted in an 18% discount rate, while the BVR Cost of Capital Professional calculations resulted in a 19% discount rate. The Pepperdine calculations (from the 2021 report) resulted in a discount rate of 18%. The Damodaran discount rate was 8%, but, as mentioned above, this does not include adjustments for size or company-specific risk factors. &lt;/p&gt;
  229. &lt;p&gt;In the &lt;em&gt;Hardball&lt;/em&gt; publication, Hitchner goes into great detail about all four data sets and the results of the case study.&lt;/p&gt;
  230. &lt;hr /&gt;
  231. &lt;p&gt;&lt;sup&gt;1&lt;/sup&gt;&amp;nbsp;"New Cost of Equity Capital Case Study: Kroll vs. Business Valuation Resources vs. Damodaran vs. Surveys," &lt;em&gt;Hardball With Hitchner,&lt;/em&gt; Issue 24, October 2022; &lt;a href="https://www.valuationproducts.com/hardball-with-hitchner/" target="_blank"&gt;valuationproducts.com/hardball-with-hitchner&lt;/a&gt;.&lt;/p&gt;
  232. &lt;p&gt;&lt;sup&gt;2&lt;/sup&gt; &amp;ldquo;BVR and Duff &amp;amp; Phelps Cost of Capital Platforms Go Head-to-Head at VSCPA,&amp;rdquo; &lt;em&gt;Business Valuation Update, &lt;/em&gt;Vol. 25, No. 11, November 2019.&amp;nbsp;&lt;/p&gt;
  233. &lt;p&gt;&lt;sup&gt;3&lt;/sup&gt;&amp;nbsp;&lt;a href="https://www.bvresources.com/products/financial-valuation-applications-and-models-website-4th-edition" target="_blank" style="background-color: #ffffff;"&gt;bvresources.com/products/financial-valuation-applications-and-models-website-4th-edition&lt;/a&gt;.&amp;nbsp;&lt;/p&gt;
  234. &lt;p&gt;&lt;sup&gt;4&lt;/sup&gt;&amp;nbsp;&lt;a href="https://www.kroll.com/en/cost-of-capital" target="_blank"&gt;kroll.com/en/cost-of-capital&lt;/a&gt;.&lt;/p&gt;
  235. &lt;p&gt;&lt;sup&gt;5&lt;/sup&gt;&amp;nbsp;&lt;a href="https://www.bvresources.com/products/cost-of-capital-professional" target="_blank"&gt;bvresources.com/products/cost-of-capital-professional&lt;/a&gt;.&lt;/p&gt;
  236. &lt;p&gt;&lt;sup&gt;6&lt;/sup&gt;&amp;nbsp;&lt;a href="https://pages.stern.nyu.edu/~adamodar/New_Home_Page/data.html" target="_blank"&gt;pages.stern.nyu.edu/~adamodar/New_Home_Page/data.html&lt;/a&gt;.&lt;/p&gt;
  237. &lt;p&gt;&lt;sup&gt;7&lt;/sup&gt;&amp;nbsp;&lt;a href="https://www.privatecap.org/pcm_report" target="_blank"&gt;privatecap.org/pcm_report&lt;/a&gt;.&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:36ceb252-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/01/17/robert-bob-kleeman-dies</link><a10:author><a10:name> </a10:name></a10:author><title>Robert “Bob” Kleeman Dies</title><description>Robert “Bob” Kleeman, CPA/ABV, ASA, a longtime member of the business valuation community, passed away on Saturday evening, Jan. 13, 2024. </description><pubDate>Wed, 17 Jan 2024 22:32:09 Z</pubDate><a10:content type="text">&lt;p&gt;&lt;img src="https://www.bvresources.com/images/default-source/blog-images/bvlaw/kleeman.jpg?sfvrsn=f3e5d9b2_0&amp;amp;MaxWidth=200&amp;amp;MaxHeight=&amp;amp;ScaleUp=false&amp;amp;Quality=High&amp;amp;Method=ResizeFitToAreaArguments&amp;amp;Signature=F5D4A30C5A50B84D83D80B56769C6A9826A1A1F9" data-displaymode="Custom" alt="kleeman" title="kleeman" data-method="ResizeFitToAreaArguments" data-customsizemethodproperties="{'MaxWidth':'200','MaxHeight':'','ScaleUp':false,'Quality':'High'}" style="float: left; margin-top: 0px; margin-bottom: 10px; margin-right: 15px;" /&gt;Robert &amp;ldquo;Bob&amp;rdquo; Kleeman, CPA/ABV, ASA, a longtime member of the business valuation community, passed away on Saturday evening, Jan. 13, 2024. Bob was one of the top BV professionals beginning in the early days of BV, the 1970s.&amp;nbsp;Bob was wellknown in the BV community and was very generous in sharing his time to help other BV professionals whether they were experienced or just beginning. Bob taught and spoke at many conferences throughout the country.&lt;/p&gt;
  238. &lt;p&gt;In 1997, Bob was the chairman of the AICPA&amp;rsquo;s FVS Conference in San Diego. I attended that conference and made it known to Bob that I was leaving Blue &amp;amp; Co. in Indianapolis and needed a place to go. He jumped on it and championed me with Clifton Gunderson LLP. He was there when I needed a place to land.&amp;nbsp; We were partners at CG together from May 1998 to June 2005. Bob was a loyal friend.&lt;/p&gt;
  239. &lt;p&gt;Bob was one of the pioneers in developing the ABV credential and a true pioneer of the BV profession. Bob will be missed. Rest in peace.&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:3e8db252-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2024/01/12/preview-business-valuation-update-yearbook-2024</link><a10:author><a10:name> </a10:name></a10:author><title>Preview: Business Valuation Update Yearbook 2024</title><description>The year 2023 was defined by unexpected economic events, new valuation conferences, and more. To kick off a new year, BVR has just released the Business Valuation Update Yearbook, 2024 edition, with 404 pages of the biggest events in valuation from the last year.</description><pubDate>Fri, 12 Jan 2024 17:13:11 Z</pubDate><a10:content type="text">&lt;p&gt;The year 2023 was defined by unexpected economic events, new valuation conferences, and more. To kick off a new year, BVR has just released the &lt;em&gt;Business Valuation Update Yearbook, &lt;/em&gt;2024 edition, with 404 pages of the biggest events in valuation from the last year. Enjoy this preview taken from the chapter "How to Use the Latest DLOM Study for the Johnson/Park Empirical Method."&lt;/p&gt;
  240. &lt;p&gt;Over a quarter (27%) of valuation practitioners surveyed say they use the Johnson/Park empirical&amp;nbsp; method for determining discounts for lack of marketability (DLOM) in the valuation of interests&amp;nbsp;in privately held entities.&lt;sup&gt;1&amp;nbsp;&lt;/sup&gt;The recently released &amp;ldquo;2022 Discount for Lack of Marketability (DLOM) Study&amp;rdquo; provides current DLOM rates of return to use when implementing the method.&lt;sup&gt;2&lt;/sup&gt;&lt;/p&gt;
  241. &lt;p&gt;&lt;strong&gt;In a nutshell.&lt;/strong&gt; The method is based on the fundamental financial concept of risk and reward, i.e.,&amp;nbsp; when risk increases, an investor will demand a higher return. But just how much higher? The&amp;nbsp; Johnson/Park empirical method provides a basis to determine how much of an increase in the rate&amp;nbsp; of return is required to compensate investors for the lack of marketability of a subject interest. The&amp;nbsp; method involves making an analytical adjustment (applying a DLOM) to increase the rate of return&amp;nbsp;&lt;br /&gt;
  242. of the investment to compensate for the additional risks an investor is exposed to when holding&amp;nbsp;a nonmarketable interest. The application of the DLOM results in an increase in the effective rate&amp;nbsp; of return of the investment.&lt;/p&gt;
  243. &lt;p&gt;Three research studies are used (published annually): &amp;ldquo;Private Equity vs. Public Equity Returns,&amp;rdquo;&amp;nbsp;&amp;ldquo;Restricted Stock Transactions,&amp;rdquo; and &amp;ldquo;LT vs. ST Bond Horizon Risk.&amp;rdquo; This methodology was introduced in 1995 and has been used in several tax court cases including the first family limited&amp;nbsp; partnership (FLP) case to go to trial.&lt;/p&gt;
  244. &lt;p&gt;&lt;img src="https://www.bvresources.com/images/default-source/blog-images/bvwire/figure1.jpg?sfvrsn=4ea5d9b2_0" data-displaymode="Original" alt="figure1" title="figure1" /&gt;&lt;/p&gt;
  245. &lt;p&gt;&lt;strong&gt;2022 rates.&lt;/strong&gt; The three annual studies the 2022 report examines show that investors continue to&amp;nbsp;demand 30% to 45% higher rates of return for the additional risk of holding a nonmarketable investment or being exposed to increased risk over the holding period. Comparing the 2022 findings with the research that has been conducted since 2006 indicates a similar range of results for the&amp;nbsp;average increase in the required rate of return (see Exhibit 1).&amp;nbsp;&lt;/p&gt;
  246. &lt;p&gt;Make sure that you are up to date on all the most important valuation events from 2023 with this must-read book. Learn more about this essential read here; while you&amp;rsquo;re at it, make sure that you&amp;rsquo;re up to date on all the most impactful valuation law cases of 2023 by checking out the &lt;em&gt;&lt;a href="https://www.bvresources.com/products/business-valuation-update-yearbook-2024-edition" target="_blank"&gt;&lt;em&gt;&lt;strong&gt;Business Valuation Update Yearbook,&lt;/strong&gt;&lt;/em&gt;&lt;strong&gt; 2024 &lt;em&gt;edition.&lt;/em&gt;&lt;/strong&gt;&lt;/a&gt;&lt;/em&gt;&lt;/p&gt;
  247. &lt;hr /&gt;
  248. &lt;p&gt;
  249. 1. &amp;ldquo;BVR Survey on Methods Used for Estimating a Discount for Lack of Marketability (DLOM)&amp;rdquo;&amp;mdash;July 2021; free download available
  250. at: &lt;a href="https://sub.bvresources.com/defaulttextonly.asp?f=downloads" target="_blank"&gt;bvresources.com/downloads&lt;/a&gt;.&lt;/p&gt;
  251. &lt;p&gt;2.&amp;nbsp;Available at &lt;a href="https://www.bvresources.com/products/2022-discount-for-lack-of-marketability-study" target="_blank"&gt;bvresources.com/products/2022-discount-for-lack-of-marketability-study&lt;/a&gt;.&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:6444b252-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2023/12/06/bv-insights-who-does-the-marketing</link><a10:author><a10:name> </a10:name></a10:author><title>BV Insights: Who Does the Marketing?</title><description>With the 2023 BVR Benchmarking Survey closed and the full results having been released, let's take a look at some of the insights regarding practice management.</description><pubDate>Wed, 06 Dec 2023 16:58:23 Z</pubDate><a10:content type="text">&lt;p&gt;The &lt;em&gt;&lt;a href="https://www.bvresources.com/products/business-valuation-firm-benchmarking-guide-2023-edition"&gt;&lt;strong&gt;2023 BVR Benchmarking Survey&lt;/strong&gt;&lt;/a&gt;&lt;/em&gt; was produced to collect the most comprehensive data on operations, financial metrics, compensation, staffing, marketing, billing, tools and resources used, and more. With the survey closed and the full results having been released, let's take a look at some of the insights regarding practice management.&lt;/p&gt;
  252. &lt;h4&gt;Who has primary responsibility for your firm&amp;rsquo;s marketing?&lt;/h4&gt;
  253. &lt;p style="text-align: left;"&gt;It&amp;rsquo;s been said that business valuation is as much of an art as a science. We believe marketing is as much of a science as it is an art. So, while partners/owners continue to take primary responsibility for marketing, the use of full-time and part-time marketing professionals and outside contractors or consultants is becoming more common. Office managers and administrative assistants were most frequently mentioned in the &amp;ldquo;other&amp;rdquo; category.&lt;/p&gt;
  254. &lt;p style="text-align: center;"&gt;&lt;img src="https://www.bvresources.com/images/default-source/blog-images/bvwire/blog-exh-37.jpg?sfvrsn=d26fd9b2_0" data-displaymode="Original" alt="Blog Exh 37" title="Blog Exh 37" style="text-align: center;" /&gt;&lt;/p&gt;
  255. &lt;h4 style="text-align: left;"&gt;Marketing budgets&lt;/h4&gt;
  256. &lt;p style="text-align: left;"&gt;Business valuation firms employ many approaches to bring in new business. And the responses to this question must recognize that different firms may classify different expenses in different accounts (but, hopefully, under a marketing &amp;ldquo;parent&amp;rdquo; account). The 2022 mean spend on marketing is down 1% from 2018, while the median is up 2% from 2018. In addition, many respondents said they spent 0% on marketing in 2021-2022, perhaps reflecting the abundance of valuation work and the effectiveness of &amp;ldquo;aggressively waiting for the phone to ring.&amp;rdquo;&lt;/p&gt;
  257. &lt;p style="text-align: center;"&gt;&lt;img src="https://www.bvresources.com/images/default-source/blog-images/bvwire/blog-exh-38.jpg?sfvrsn=c16fd9b2_0" data-displaymode="Original" alt="Blog Exh 38" title="Blog Exh 38" style="vertical-align: middle;" /&gt;&lt;/p&gt;
  258. &lt;p style="text-align: left;"&gt;Overall, business valuation professionals understand the need for promotion and invest in it. Based on the results for 2021-2022, it seems safe to conclude that a good marketing budgeting benchmark is 0% to 5% of firm revenues.&lt;/p&gt;
  259. &lt;p style="text-align: left;"&gt;Looking for more insights? The &lt;em&gt;&lt;a href="https://www.bvresources.com/products/business-valuation-firm-benchmarking-guide-2023-edition"&gt;&lt;strong&gt;Business Valuation Firm Benchmarking Guide: 2023 Edition&lt;/strong&gt;&lt;/a&gt;&lt;/em&gt;&amp;nbsp;is replete with data on a range of topics from current staffing levels to critical issues impacting the industry itself, and all the answers are sourced directly from BV firms. Get your copy, and see what your peers are saying now!&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:3b39b252-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2023/11/15/sneak-peek-valuing-jewelry-stores</link><a10:author><a10:name> </a10:name></a10:author><title>Sneak Peek: Valuing Jewelry Stores</title><description>Stay apprised of all the latest business considerations in the jewelry industry! The report explains how jewelry stores operate, the nature of their revenue streams, and more. Read on to explore Chapter 2 of the guide.</description><pubDate>Wed, 15 Nov 2023 21:59:47 Z</pubDate><a10:content type="text">&lt;p&gt;&lt;em&gt;&lt;a href="https://www.bvresources.com/products/what-it-s-worth-valuing-jewelry-stores"&gt;What It&amp;rsquo;s Worth: Valuing Jewelry Stores&lt;/a&gt; &lt;/em&gt;is the latest in BVR's series of special reports and is an ideal and timely resource for anyone looking for insight into what drives value in the jewelry industry. With that in mind, let's take a look at Chapter 2, "Macro Drivers of Profit in the Retail Jewelry Industry."&lt;/p&gt;
  260. &lt;h5&gt;Attracting New Customers&lt;/h5&gt;
  261. &lt;p&gt;Jewelry stores face competition for new customers from other jewelry stores and other channels, including department stores, mass merchandisers, warehouse clubs, and online retailers. Companies invest in store furnishings and fixtures to create a distinctive ambience that attracts shoppers. They may also invest in branded jewelry lines from celebrities or organizations to attract new customers. Marketing via direct mail, local advertising, and social media is often used prior to major holidays to help drive store traffic and reach out to new customers.&lt;/p&gt;
  262. &lt;h5&gt;Building Repeat Business&lt;/h5&gt;
  263. &lt;p&gt;Jewelry stores often rely on repeat purchases from wealthy customers to generate steady revenue. By providing attentive service and developing trust, stores encourage buyers to return for additional purchases during major holidays, anniversaries, and birthdays. Developing a customer information system that tracks purchases and personal information, such as birthdays and anniversaries, allows stores to provide personalized communications to customers and provide better recommendations on gift purchases that complement previous purchases.&lt;br /&gt;
  264. Customer loyalty programs that provide discounts and other rewards can also encourage repeat purchases.&lt;/p&gt;
  265. &lt;h5&gt;Increasing Average Sales Size&lt;/h5&gt;
  266. &lt;p&gt;Besides increasing the number of customer transactions through higher traffic, jewelry stores can grow revenue by growing the average sales size. Sales staff are typically trained to offer &amp;ldquo;upsell&amp;rdquo; opportunities by showing more expensive pieces as options to buyers. They are also trained to recommend complementary add-on purchases, such as earrings to match a new necklace. Stores can encourage multiple-item sales by displaying jewelry in sets and may even offer a discount on buying multiple items at a time.&lt;/p&gt;
  267. &lt;p&gt;&lt;em&gt;&lt;a href="https://www.bvresources.com/products/what-it-s-worth-valuing-jewelry-stores"&gt;What It&amp;rsquo;s Worth: Valuing Jewelry Stores&lt;/a&gt; &lt;/em&gt;gives you the big picture on the unique considerations in the jewelry industry and tackles important topics such as: trends impacting the industry; the key internal, external, and qualitative drivers; and important questions to ask management when preparing your valuation.&lt;/p&gt;</a10:content></item><item><guid isPermaLink="false">urn:uuid:2beeb152-002b-6b40-82e1-ff0000eee7a0</guid><link>https://www.bvresources.com/blogs/bvwire-news/2023/10/13/what-do-interest-rates-have-to-do-with-it</link><a10:author><a10:name> </a10:name></a10:author><title>What Do Interest Rates Have to Do With It?</title><description>As business valuators, we know well that interest rates can impact the value of a business in a number of ways. So what do interest rates have to do with it?</description><pubDate>Fri, 13 Oct 2023 20:27:22 Z</pubDate><a10:content type="text">&lt;p&gt;So what do interest rates have to do with it? With what, you say?&amp;nbsp;As business valuators, we know well that interest rates can impact the value of a business in a number of ways. The first and most obvious is that the required rate of return (ROR) on an investment in a business rises and falls in relation to the interest rates in the economy. As the ROR increases, the present value of cash flows to the business goes down. The interest rate itself is not an indicator of risk in the investment, which is an important factor in determining a business&amp;rsquo;s estimated value. It is more a determination of cost of an investment.&amp;nbsp;As Ron DiMattia, CPA/ABV, CMA,&amp;nbsp;pointed out in an article in the recent &lt;em&gt;Business Valuation Update&lt;/em&gt; newsletter,&amp;nbsp;&amp;ldquo;[t]here are many ways that an analyst can deal with matters of perceived risk in their valuation assumptions.&amp;rdquo;&lt;sup&gt;1&lt;/sup&gt; He was pointing out that one of the areas that arguably does not include risk is the determination of the risk-free rate.&lt;sup&gt;2&lt;/sup&gt; But we know that rate does fluctuate with changes in the prime rate.&amp;nbsp;&lt;/p&gt;
  268. &lt;p&gt;Of course, the most recognizable impact of changes in the prime interest rate is in the cost to borrow money. As consumers, we know that firsthand. Mortgage rates are higher, credit card rates can go higher, personal loan rates are higher, etc. To the value of a business, this also changes the dynamic and the value. The capital structure of a business is made up of equity investments and borrowing, or leverage. There is a balance between those two elements, and the cost of borrowing can impact that balance. Higher interest rates mean less cash flow to equity investors. The lower the cash flow, the lesser the value of the business. With a current prime rate of 8.50% versus years of the prime rate hovering at about 3.25%, one can see that the dynamic in both the value of a business and in how to structure a business has changed.&lt;/p&gt;
  269. &lt;p&gt;So why are we talking about this subject? It is pretty basic, isn&amp;rsquo;t it? Well, yes and no. I was talking to my 36-year-old nephew this morning. He is a managing director at KPMG in the M&amp;amp;A group. I said to him that he probably has never seen interest rates high like this in his lifetime. He admitted that he had not. If he were to ask his mother about high rates, he would find that, when she and his father bought their first house, the interest rate on their mortgage was 17%!&amp;nbsp;&lt;/p&gt;
  270. &lt;p&gt;Young people from age 22 to 40 are either starting in business or, like my nephew, already very experienced in business and have never had to deal with interest rate. They are finding out in a hurry that interest rates are a material consideration in valuing, buying and selling, and operating a business in times of volatile changes in interest rates. Welcome to the laboratory of life.&lt;/p&gt;
  271. &lt;hr /&gt;
  272. &lt;sup&gt;1&lt;/sup&gt; Ronald D. DiMattia, "&lt;a href="https://www.bvresources.com/articles/business-valuation-update/practical-considerations-in-normalizing-the-risk-free-rate"&gt;Practical Considerations in Normalizing the Risk-Free Rate&lt;/a&gt;," &lt;em&gt;Business Valuation Update,&lt;/em&gt; Vol. 29, No. 10, October 2023; Business Valuation Resources, LLC, Portland, Ore.&lt;br /&gt;
  273. &lt;sup&gt;2&lt;/sup&gt; The risk-free rate equivalent is, by consensus, equal to the 20-year yield rate on a U.S. Treasury Bond.&lt;br /&gt;
  274. &lt;div&gt;&amp;nbsp;&lt;/div&gt;</a10:content></item></channel></rss>

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