Greetings. Here are your Articles for September 2020
Cost Approach to Value Methodology
in the Era of COVID-19
Authored by,
Sobel EAC Valuations

Part 1:
Calculating an Accurate Replacement Cost New

This article is the first in a two-part series. It discusses steps that can be taken to improve the accuracy of “Replacement Cost New” (RCN) calculations when using the cost approach to value. In the second part of this series, I will discuss depreciation of assets.
Valuations of S Corporations and the
Tax Cuts and Jobs Act
Authored by
Sobel EAC Valuations

While this discussion is related to S corporations, much of it is equally applicable to other pass-through entities such as Limited Liability Companies.

An S election, where earnings are “passed through” to shareholders, has been traditionally been desirable because it eliminates the double taxation of C corporation profits that are taxed first at the corporate level and a second time when distributed to shareholders as dividends. Before the Tax Cuts and Jobs Act (“TCJA”), this “benefit” was clear, and valuation literature provided several methodologies to calculate such benefit. The provisions of the TCJA, effective January 2018, challenge this traditional assumption.
Avoiding A Common Valuation Mistake: The Importance of Matching Cash Flows and Rates of Return
Authored by
Sobel EAC Valuations

If you have been on the receiving end of one of our business valuation reports, you may have seen an appendix containing the International Glossary of Business Valuation terms. Several business valuation organizations developed this Glossary: ASA (American Society of Appraisers), AICPA (American Institute of Certified Public Accountants), CBV Institute (Canadian Institute of Chartered Business Valuators), NACVA (National Association of Certified Valuators and Analysts, and IBA (The Institute of Business Appraisers).

In this article, I would like to highlight four key definitions and how certain cash flows are calculated.