"Insights on Valuation"
The latest issue of our “Insights on Valuation” newsletter is now available. Arxis Financial, Inc. is pleased to provide this highly respected, nationwide publication which features valuable information that is applicable to many litigation matters. Topics in this issue include:
• Update on the Valuation of Passthrough Entities: Income tax structure for business entities generally falls under two categories: entity level taxation or pass-through taxation. Pass-through taxation means that the entity computes its taxable income, but the owners pay the tax. When valuing a pass-through entity, to what income stream should the discount rate be applied? In the now famous tax court case Gross v. CIR (T.C. Memo 1999-254, affirmed by the 6th circuit), the court decided that ….
• Baby Boomer Business Owners and Retirement: The Time to Plan is Now: Baby boomer business owners are looking to turn their years of sweat and toil into cash for retirement, but the faltering economy has resulted in a buyer’s market, negatively impacting value. Further, the large number of baby boomers wanting to sell their businesses will likely result in a glut of businesses on the market in the coming years, which can further depress prices. However, a well-planned strategy, implemented sooner rather than later, can help business owners to realize their dream ... .
• Goodwill Impairment Testing — FASB Updates: Recently, the Financial Accounting Standards Board (FASB) approved changes that will simplify the rules for testing goodwill for impairment. Goodwill impairment occurs when the implied fair value of a company’s goodwill declines to an amount that is less than its carrying amount on the company’s books. FASB made these changes because preparers of private company financial statements expressed concerns about the recurring cost and complexity of performing the first step of the two-step goodwill impairment test required under FASB’s rules.
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