Online Directory | NACVA Site Search:

Business Valuation, DLOM and Daubert: The Issue of Redundancy

Business Valuation

 Business Valuation, DLOM and Daubert: The Issue of Redundancy
CPE Credit

Program Type: VideoCast (Audio,Video, PPT Presentation)
Program Level: Overview
Prerequisites: None
Advanced Preparation: None
Delivery Method: Group Internet-Based
CPE Credits: Two (2) hours
Fields of Study: Accounting
Item Number: 11OMLVC4360
Shipping Weight: 0lbs. 0oz.
Price: $110.00
Program Description

Business valuations are a common subject of dispute in tax and divorce litigation, with the valuation consequences of private\company status of a closely held (often family) business being especially contentious. It is not well known that core valuation methodologies such as DCF analysis have the effect of discounting the future cash flows of small businesses substantially, generally by 40% to 60%, dollar-for-dollar, for lack of size alone.

Because there is a strong empirical relation between size and liquidity, there is a great likelihood that any supplemental discounting for illiquidity will be redundant and entail double discounting. Accordingly, the large liquidity discounts or DLOMs that are accepted practice in business valuation and that have been embraced by many judges presumptively violate the Daubert requirement for reliability.


Robert Comment, MBA, PhD, CVA, 2011 Dr. Rosemarie O. (Ro) Smith Academic Grant Recipient