Conference Presentations, Webinars, and Professional Journal Articles


Our analysts frequently deliver conference speeches and author journal articles on topics related to business and intangible asset valuation, forensic analysis, and financial advisory services. The presentations are delivered at seminars and conferences of national and local bar associations, national and state CPA societies, estate planning associations, taxation institutes, and valuation associations, to name a few. The presentation materials from some of these conference speeches are available here.

Our analysts frequently publish in accounting, finance, and legal professional journals. And, our analysts frequently author technical issue white papers for professional organizations. Recent journal articles and white papers authored by Willamette Management Associates analysts are also available here.

Below we list articles authored by our analysts that have recently appeared in publications that are not readily available online.


  “What Lawyers Need to Know about the Asset-Based Approach to Business Valuation (Part 1)”
By Robert Reilly, a managing director of our firm, published in the October 2018 issue of The Practical Lawyer.
Legal counsel often retain and rely on valuation analysts to estimate the value of a business, business ownership interest, or securities involved in litigation. Analysts typically apply one or more generally accepted approaches to valuing such interests. This article focuses on one such approach—the asset-based approach. Robert examines the use of this approach in the context of both a going-concern-basis valuation and a liquidation-basis valuation
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  “Using the Cost Approach to Value Internally Developed Computer Software for Property Tax Purposes”
By Connor Thurman, an associate in our Portland office, published in the September 2018 issue of the Journal of Multistate Taxation and Incentives, a Thomson Reuters publication.
Connor discusses on generally accepted methods that valuation analysts may use to value internally developed software for property tax purposes. Connor focuses in particular on the cost approach and the replacement cost new less depreciation method for valuing computer software.
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  “Overview of the But-for Investment Portfolio to Measure Trustee Breach of Fiduciary Duty Damages”
By Kyle Wishing, a manager in our Atlanta office, and Nicholas Henriquez, an associate in our Atlanta office, published in the June/July 2018 issue of the Financial Valuation and Litigation Expert.
Kyle and Nicholas provide historical precedence for the but-for investment portfolio. They summarize common allegations in breach of fiduciary duty disputes. And, Kyle and Nicholas examine the construction of the buy-for investment portfolio and explore the accompanying complexities in the construction of such a portfolio.
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  “Intellectual Property Valuations for License and Other Transfer Purposes” Part 2
By Robert Reilly, a managing director of our firm, and Casey Karlsen, an associate in our Portland office, published in the September 2018 issue of les Nouvelles.
In part 2 of this article, Robert provides an illustrative example of an intellectual property valuation using license agreement databases to help estimate an arm’s-length royalty rate. Robert’s article may be viewed at the link below.
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  15 Differences between Unit Valuations, Summation Valuations, and Business Valuations
Robert F. Reilly, a managing director of our firm, delivered this presentation to the 48th Annual Taxation Conference: Appraisal for Ad Valorem Taxation of Communications, Energy, and Transportation Properties. The conference was held in Wichita on July 29-August 2, 2018.
Robert’s presentation considers both the conceptual and the practical differences among these three different (but related) types of valuation analyses. He reviews the different bundles of ownership interests in each type of analysis. Robert explores application of the three generally accepted valuation methods within each type of analysis. He reviews common misconceptions about unit principle valuation analyses.
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  Valuation and Extraction of Intangible Assets from a Legal and Valuation Perspective
John C. Ramirez, a vice president of our firm, and David J. Crapo, Esq., a partner with Crapo Deeds PLLC, delivered this presentation to the 48th Annual Taxation Conference: Appraisal for Ad Valorem Taxation of Communications, Energy, and Transportation Properties. The conference was held in Wichita on July 29-August 2, 2018.
John and David review the identification and extraction of intangible asset value in the application of the unit principle valuation analysis. They focus on the legal and valuation definitions of intangible assets, legal precedent and areas of continuing controversy involving the extraction of intangible assets from unit valuations, and the generally accepted valuation methods used to identify and extract intangible asset value.
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  “Intellectual Property Valuations for License and Other Transfer Purposes” Part 1
By Robert Reilly, a managing director of our firm, and Casey Karlsen, an associate in our Portland office, published in the June 2018 issue of les Nouvelles.
Robert focuses on what analysts need to know about intellectual property (IP) valuation for licensing, transfer, financing, or taxation purposes. After a brief summary of the types of IP and generally accepted methods for valuing IP, he focuses particularly on the market approach to IP valuation and, specifically, on the relief from royalty method. Robert’s article may be viewed at the link below.
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  “Valuation of Intangible Assets in Family Law Cases: Part 1 of III”
By Robert Reilly, a managing director of our firm, published in the Summer 2018 issue of the American Journal of Family Law.
Robert’s three-part article discusses the valuation of intangible assets for family law purposes. Under certain circumstances, intangible assets are valued and recorded for US GAAP compliance purposes. In Part I, Robert summarizes the generally accepted procedures used to value identifiable intangible assets for GAAP financial reporting purposes. He goes on to explore how those procedures may inform marital parties, family law counsel, and valuation analysts who have to recognize and value intangible assets as part of a family law matter.
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  “An Arm’s Length Approach to Trademark Royalty Rates”
By John Ramirez, a vice president in our Portland office, and Casey Karlsen, an associate in our Portland office, published in the February/March 2018 issue of World Trademark Review.
John and Casey’s article summarizes the regulations for transfer pricing for federal income tax purposes and describes the intangible property intercompany transfer price methods that can be used to evaluate whether transactions between members of controlled groups satisfy the arm’s-length standard. They offer insight into factors to consider when estimating trademark royalty rates for intercompany transfer price analyses. In particular, they focus on comparability factors for selecting market-based transactional data.
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  “Fair Value Not Based on the Merger Price—Parts I and II”
By Kevin Zanni, a director in our Chicago office, published in the May 2, 2018, and May 9, 2018, issues of QuickRead. Reproduced with permission from the QuickRead, published by the National Association of Certified Valuators and Analysts®, www.QuickReadBuzz.com. All rights reserved.
Kevin’s article focuses on the SWS Group case and on the interplay between merger price and fair value. The decision in this case highlights the risk of an arbitrage appraisal strategy. The decision also highlights how valuation analysts can sometimes arrive at quite divergent opinions of value. There is concern that the Delaware Chancery Court may view analysts as advocates for their clients rather than advocates for their independent valuation opinion.
Part 1
part 2

  “The Independent Investor Test for Reasonableness of Shareholder/Employee Compensation in Tax Controversies”
By Robert Reilly, a managing director of our firm, published in the Spring 2018, issue of The Practical Tax Lawyer.
Controversies regarding the reasonableness of shareholder/employee compensation may arrive in many different contexts, including income tax matters, ESOP/ERISA matters, and transactions, to name a few. Robert reviews various methods for estimating reasonable compensation. He focuses on one method: the independent investor test and reviews a recent judicial decision that involved this method.
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  “Reasonableness of Compensation Guidance for Construction Industry Taxpayers”
By Robert Reilly, a managing director of our firm, published in the January/February 2018, issue of Construction Accounting and Taxation.
Robert focuses this article on the U.S. Tax Court decision in H.W. Johnson, Inc. v. Commissioner, which was a taxpayer-friendly judicial decision. This case involved payments to shareholder/employees and whether they were reasonable compensation and the deductibility of related-party payments. The case illustrates the importance of documentation of the actual relevant facts and circumstances. Good documentation may help the taxpayer win the day with regard to the tax deductibility of (1) shareholder/employee compensation and (2) related-party payments.
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  “The Fair Value Valuation of Intangible Assets for Acquisition Accounting Controversy Purposes—Parts 1 through 3”
By Robert Reilly, a managing director of our firm, published in the October/November 2017, December 2017/January 2018, and February/March 2018, issues of Financial Valuation and Litigation Expert.
Robert’s article focuses on regulatory challenges and shareholder/investor claims with regard to the acquirer’s application of ASC business combination accounting. In particular, this article explores the acquisition accounting provisions related to identifiable intangible assets. Robert begins by examining what qualifies as an intangible asset. He examines the factors that affect the fair value of acquired intangible assets. In part 2, Robert presents illustrative examples of the income and cost approaches to the valuation of intangible assets. Part 3 contains an illustrative example of the market approach to valuing intangible assets.
Part 1
part 2reilly_fair_value_part2_fvle_2018.pdf
part 3

  “Intellectual Property Analysis as Part of a Property Tax Unit Principle Valuation”
By Robert Reilly, a managing director of our firm, and Casey Karlsen, an associate of our firm, published in the March/April 2018, issue of Journal of Multistate Taxation and Incentives.
Owners of closely held companies often must consider numerous issues with regard to the compensation of key employees. Robert and Casey’s article focuses on the market approach to the valuation of intellectual property—in particular on the relief from royalty method. This method is commonly used to value intellectual property. The method is particularly applicable to the valuation of intellectual property that should be subtracted from the total unit value in order to conclude the valuation of taxpayer real estate and tangible personal property subject to property taxation. An illustrative example is provided. See More

  “Transferring Closely Held Company Equity to a Key Employee—Parts I and II”
By Robert Reilly, a managing director of our firm, published in the March 14, 2018, and March 21, 2018, issues of QuickRead. Reproduced with permission from the QuickRead, published by the National Association of Certified Valuators and Analysts®, www.QuickReadBuzz.com. All rights reserved.
Owners of closely held companies often must consider numerous issues with regard to the compensation of key employees. Robert’s article considers some of the options available to closely held company owners who want to provide equity (or quasi-equity) ownership to a key employee. Robert uses an illustrative example with a hypothetical fact set to illustrate the considerations involved in this decision. In Part II of the article, Robert explores the alternative structures for transferring equity. These equity transfer structures may include issuing phantom stock, granting stock appreciation rights, or creating a partnership, to name a few.
Part 1
part 2

  “Differences between Business Valuations, Unit Valuations, and Summation Valuations in the Construction Industry – Parts 1 and 2””
By Robert Reilly, a managing director of our firm, published in the July/August 2017 and September/October 2017 issues of Construction Accounting and Taxation.
Part 1 of Robert’s article discusses the conceptual and practical differences between the use of a unit valuation principle to value complex industrial and commercial properties and the use of the summation valuation principle to value more simple industrial and commercial properties. The article summarizes the procedural difference between the unit principle and the summation principle. In Part II of the article, Robert explores the analytical differences among business valuations, unit valuations, and summation valuations.
Part 1
part 2

  “The Fair Value Valuation of Intangible Assets for Acquisition Accounting Controversy Purposes – Parts 1-3”
By Robert Reilly, a managing director of our firm, published in the October/November 2017, December 2017/January 2018, and February/March 2018 issues of Financial Valuation and Litigation Expert.
In part 1 of Robert’s article, he focus on the intangible asset valuation practical guidance that valuation analysts can extract from the acquisition accounting GAAP. Robert summarizes guidance found in ASC 805 and ASC 820. In particular, he discusses categories of intangible assets, data gathering and due diligence, intangible asset valuation approaches and methods, and tax amortization benefit adjustments. In part 2 of the article, Robert provides illustrative examples of the income approach and cost approach valuation approaches. In part 3, Robert provides an illustrative example of the market approach and reviews some common sources of royalty rate data.
Part 1
part 2
part 3

  “Valuation of a Family Business Interest”
By Curtis Kimball, a managing director in our Atlanta office, along with Keri Brown, a partner at Baker Botts L.L.P., published in the December 2017 issue of Estate Planning Course Materials Journal. Reprinted with permission from the December 2017 issue of ALI-CLE’s Estate Planning Course Materials Journal.
Curtis and Keri discuss the valuation analyst’s role and the attorney’s role in valuations for estate planning purposes. They summarize the importance of a credible valuation report. Curtis and Keri provide a handy list of questions to ask when hiring a valuation analyst and discuss some basic estate and gift tax valuation terms. They explore the accuracy-related penalties that may be imposed upon valuation analysts by the IRS. Finally, Curtis and Keri provide a sample professional services agreement. See More

  “Intangible Asset Valuations for Federal Taxation Purposes”
By Robert Reilly, a managing director of our firm, published in the November 2017 issue of Practical Tax Strategies.
Robert’s article focuses on the intangible asset valuation practical guidance that valuation analysts can extract from the acquisition accounting GAAP. Robert summarizes guidance found in ASC 805 and ASC 820. In particular, he discusses categories of intangible assets, data gathering and due diligence, intangible asset valuation approaches and methods, tax amortization benefit adjustments. Robert also provides illustrative examples of the three generally accepted valuation approaches. See More

  “Unit, Summation, and Business Value in Property Tax Valuations”
By Robert Reilly, a managing director of our firm, published in the September 2017 issue of Practical Tax Strategies.
Although the differences between unit value, summation value, and business value are subtle, the distinction is important. This is because each one values a different bundle of taxpayer interests. Robert discusses 14 important analytical differences as they relate to valuations performed for ad valorem property tax purposes. See More

  “The Application of Guideline Publicly Traded Company Risk Adjustment”
By Kevin Zanni, a director in our Chicago office, published in the November 15, 2017, issue of QuickRead. Reproduced with permission from the QuickRead, November 15, 2017, published by the National Association of Certified Valuators and Analysts®, www.QuickReadBuzz.com. All rights reserved.
Using a recent Department of Justice investigation into a government contractor as an example, Kevin’s article summarizes one method that a valuation analyst may consider in order to quantify the effect that a significant negative event may have on a company’s stock value. Kevin reviews the company operations at the time of the valuation and identifies and summarizes the unique problem at issue. He presents several possible solutions for addressing the effect that the unique problem had on the company stock valuation. Finally, Kevin examines one possible valuation solution and describes the implementation of that solution. See More

  “Reasonableness of Shareholder/Executive Compensation”
By Casey Karlsen, an associate in our Portland office, and Lisa Tran, a manager in our Portland office, published in the November 8, 2017, issue of QuickRead. Reproduced with permission from the QuickRead, November 8, 2017, published by the National Association of Certified Valuators and Analysts®, www.QuickReadBuzz.com. All rights reserved.
Casey and Lisa’s article summarizes the federal income tax regulations and judicial precedent related to shareholder/executive compensation. The article includes a list of frequently relied upon data sources for estimating reasonable executive compensation. It also reviews several issues that were discussed in recent judicial decisions regarding shareholder/executive compensation. See More

  Intellectual Property Valuation Application of the Relief from Royalty Method
Robert F. Reilly, a managing director of our firm, delivered this presentation to the Advanced Business Valuation Conference of the American Society of Appraisers. The conference was held in Houston on October 7-10, 2017.
Robert described the four types of intellectual property. He examined use of royalty rate data in intellectual property analyses and data sources for such royalty rates. Robert discussed the purpose of making royalty rate normalization adjustments. Robert also provided an illustrative example of the relief from royalty method. See More

 
  Intangible Asset Valuations for Controversy Purposes
Bob Schweihs, a managing director of our firm, delivered this presentation to the Business Valuation Conference sponsored by the Indiana Society of CPAs. The conference was held in Indianapolis on October 25, 2017.
Bob discussed the various types of intangible assets and intellectual property. He explored the generally accepted approaches and methods for valuing intangible assets. He also discussed damages measurement methods for intangible assets. Bob discussed the differences between business valuation and intangible asset valuation. See More

 
  Identification and Valuation of Acquired Intangible Assets for Financial Statement Reporting Purposes
Bob Schweihs, a managing director of our firm, delivered this presentation to the Business Valuation Conference sponsored by the Indiana Society of CPAs. The conference was held in Indianapolis on October 25, 2017.
Bob discussed the identification of of intangible assets. He explored procedures for gathering data and performing due diligence. He discussed the generally accepted approaches and methods for valuing intangible assets. Bob provided examples of the cost approach, market approach and income approach for valuing intangible assets. See More

  “The Value of a Business is Not Always What it Seems (Part I of II)”
By Sam Nicholls, vice president in our Atlanta office, published in the August 30, 2017, issue of QuickRead. Reproduced with permission from the QuickRead, August 30, 2017, published by the National Association of Certified Valuators and Analysts®, www.QuickReadBuzz.com. All rights reserved.
Personal goodwill is taxed at the individual capital gains tax rate, not the higher corporate income tax rate. Therefore, a credible personal goodwill calculation can amount to significant tax savings. One that is not adequately defensible invites risk of an audit. Every personal goodwill calculation is unique to each business, and the management interview is crucial. In this first of a two-part article, the author discusses when goodwill may need to be calculated and answers whether goodwill is only present if a key employee is irreplaceable and/or a revenue generator. See More

 Identification and Valuation of Acquired Intangible Assets for ASC 805 Business Combination Purposes
Robert F. Reilly, a managing director of our firm, delivered this presentation to the American Institute of Certified Public Accountants National Advanced Accounting and Auditing Technical Symposium. The symposium was held in Las Vegas on June 13, 2017.
Robert’s presentation explored the identification of intangible assets, due diligence and data gathering procedures, generally accepted intangible asset valuation approaches and methods, and valuation synthesis and conclusion procedures. He provided illustrative examples of the three generally accepted intangible asset valuation approaches. See More

  Market Approach Methods: Extracting Pricing Data from Market Evidence
John Ramirez, a vice president with our firm, and Casey Karlsen, an associate with our firm, delivered this presentation to the 47th Annual Taxation Conference: Appraisal for Ad Valorem Taxation of Communications, Energy, and Transportation Properties. This conference was held in Wichita, Kansas, July 23-27, 2017.
John and Casey provided an introduction to the stock and debt method of valuation and the guideline sale transaction method of valuation. They explored data sources for identifying guideline companies and guideline transactions and discussed the strengths and weaknesses of each source. They also discussed comparability criteria for selecting guideline companies and guideline transactions. See More

  “Extracting Relevant Pricing Data from Market-Based Evidence”
By John Ramirez, vice president in our Portland office, and Casey Karlsen, associate in our Portland office, published in the September 2017 issue of the Journal of Multistate Taxation and Incentives.
Valuation analysts often rely on market evidence in order to estimate the value of a taxpayer's industrial or commercial property for ad valorem property tax purposes. John and Casey explore common uses of market evidence in each of the three generally accepted property valuation approaches. They examine relevant comparability factors for analysts to consider when extracting pricing data from market-based evidence. See More

  “Calculation Engagement v. Valuation Engagement in Marital Dissolution: Insight from a Valuation Analyst”
By Justin Nielsen, vice president in our Portland office, published in the March/April 2017 issue of the San Diego Lawyer.
Justin explores the two types of valuation engagements that are included in the AICPA Statement on Standards for Valuation Services (SSVS) VS100: (1) a calculation engagement and (2) a valuation engagement. Justin discusses several scenarios in which these two types of engagements may be employed. He briefly reviews the differences between the two levels of engagements. See More

  “Compensation Adjustments in Business Valuations for Family Law Disputes”
By Scott Miller, vice president in our Portland office, and Charlene Blalock, senior research analyst in our Portland office, published in the Spring 2017 issue of the American Journal of Family Law.
Scott and Charlene discuss factors to consider when determining whether compensation is reasonable. They examine the issue of “double dipping” (using the same compensation to determine spousal support and to determine the property division). Scott and Charlene review several marital dissolution judicial decisions related to compensation. They summarize methods for adjusting for excess or insufficient compensation in a valuation. Finally, they provide sources of compensation data. See More

  “Construction Company Valuation—The Asset Accumulation Method”
By Robert F. Reilly, firm managing director, published in the January/February 2017, issue of the Construction Accounting and Taxation.
Robert’s article describes and illustrates one of the two common asset-based approach valuation methods: the asset accumulation method. Robert explores the procedures used in this method. He discusses the various categories of assets and liabilities that may be analyzed in this method (e.g., intangible personal property and contingent liabilities). He also provides an illustrative example of the method. See More

  “Methodologies for Arriving at DLOM”
By Robert F. Reilly, firm managing director, published in the April 2017, issue of the American Bankruptcy Institute Journal.
Robert’s article summarizes the factors to consider in measuring the discount for lack of marketability (DLOM) associated with noncontrolling securities of a closely held company. Robert discusses the two types of models used to measure the DLOM: empirical models and theoretical models. See More

  "The Asset-Based Approach to Business Valuation, Part 1”
By Robert F. Reilly, firm managing director, published in the February/March 2017 issue of the Financial Valuation Litigation Expert.
Robert discusses the various situations where it may be appropriate to use an asset-based approach in the valuation of a closely held company. Robert examines the theory of this approach. He also discusses reasons why this approach is not used more often. See More

  "Discount for Lack of Marketability for a Closely Held Debtor Company”
By Robert F. Reilly, firm managing director, published in the February 2017 issue of the ABI Journal, a publication of the American Bankruptcy Institute.
Robert discusses the empirical and theoretical models that analysts may use to estimate the discount for lack of marketability (DLOM). He explores the application of the DLOM to a debtor company valuation. Robert also discusses factors that may be considered in the selection of the appropriate DLOM to apply. See More

  "DLOM for a Controlling Ownership of a Closely Held Company”
By Robert F. Reilly, firm managing director, published in the Winter 2017 issue of the American Journal of Family Law.
In many marital dissolution cases, an analyst may be asked to value a controlling ownership interest in a closely held company. In some cases, a discount for lack of marketability (DLOM) is appropriate. Robert discusses the factors that an analyst typically considers when measuring a DLOM to apply in the valuation of a controlling ownership interest. See More

  “Analyst Considerations of a Taxable Stock Purchase M&A Structure”
By Robert F. Reilly, firm managing director, published in the November 2016 issue of QuickRead, a publication of the National Association of Certified Valuators and Analysts.
Robert’s article summarizes some of the tax benefits—and the tax complexities—associated with a taxable stock purchase acquisition structure. Although analysts are not expected to be transaction income tax advisors, analysts opining on deal price fairness to any deal participants should be generally aware of these transaction structure considerations.

  Intangible Asset Valuation: Cost Approach Valuation Methods and Procedures
Robert F. Reilly, a managing director of our firm, delivered a webinar for the National Association of Certified Valuators and Analysts Consultants’ Training Institute. Robert’s webinar was held on November 11, 2016.
Robert discusses the generally accepted intangible asset valuation approaches and methods. He then explores considerations related to the cost approach. Robert provides an illustrative example of the cost approach. Finally, Robert reviews intangible asset valuation report considerations. See More

  Valuation of Businesses, Securities, and Intangible Assets for Bankruptcy Purposes
Robert F. Reilly, a managing director of our firm, delivered a webinar for the National Association of Certified Valuators and Analysts Consultants’ Training Institute. Robert’s webinar was held on November 7, 2016.
Robert discusses the common reasons for conducting a bankruptcy valuation. He explores analytical issues that practitioners face in performing bankruptcy valuations. Finally, Robert reviews caveats for valuation analysts performing bankruptcy valuations. See More

  “Considerations of a Taxable Stock Purchase Acquisition Structure”
By Robert F. Reilly, firm managing director, published in the October 2016 issue of Transaction Advisors.
Robert’s article summarizes some of the tax benefits—and the tax complexities—associated with a taxable stock purchase acquisition structure. For illustrative purposes, Robert analyzes a hypothetical transaction involving the acquisition of a C corporation by an LLC. Subscribers can access Robert’s article here. See More

  "Consider the Asset-Based Approach in the Construction Company Valuation”
By Robert F. Reilly, firm managing director, published in the September/October 2016 issue of the Construction Accounting and Taxation.
Robert discusses various reasons why this approach is used less often than the income and market approaches for construction company valuations. He examines the theory of the asset-based approach. He then discusses situations where it may be appropriate use of the approach. Robert also explores the treatment of income taxes within the approach. See More

  The Benefits of Professional Standards to CA Valuation Specialists?
Robert F. Reilly, a managing director of our firm, delivered a presentation to the Business Valuation and Forensic Accounting Conference, which was held September 12-14, 2016, in Melbourne, Australia. The conference was sponsored by the Chartered Accountants of Australia and New Zealand.
Robert presented an overview of the development of standards in the United States. He explored the difference between transactional valuations and notational valuations and discussed the various types of valuation services. Robert also reviewed the differences and similarities between U.S. and Australian/New Zealand standards. See More

  Intangible Asset Valuation Approaches, Methods, and Procedures
Robert F. Reilly, a managing director of our firm, presented a workshop at the Business Valuation and Forensic Accounting Conference, which was held September 12-14, 2016, in Melbourne, Australia. The conference was sponsored by the Chartered Accountants of Australia and New Zealand.
Robert’s workshop explored the identification of various types of intangible assets and intellectual property. He reviewed data gathering and due diligence procedures. Robert explored the cost approach, income approach, and market approach to intangible asset valuation and presented an illustrative example of each method. See More

  "12 Reasons to Value IP”
By Robert F. Reilly, firm managing director, published in the September 2016 issue of the ABI Journal, a publication of the American Bankruptcy Institute.
Robert focuses on the valuation of debtor company intellectual property (IP) within a bankruptcy proceeding. He discusses the various types of debtor company IP that analysts are asked to value within a bankruptcy controversy context. He also discusses the various reasons that an IP valuation is needed in this context. See More

  Intangible Asset Valuations for Controversy Purposes
Robert Schweihs, a managing director of our firm, delivered a presentation to the Kentucky Society of CPAs Business Valuation and Litigation Conference, which was held on August 12, 2016, in Louisville, Kentucky.
Bob discussed various types of intangible asset analyses. He reviewed the generally accepted intangible asset valuation approaches and methods. Bob explored the differences between a business valuation and an intangible asset valuation. Finally, he discussed intangible asset damages measurement methods and considerations. See More

  Income Approach Issues in Valuations Prepared for Property Tax Purposes
Aaron Rotkowski, a vice president of our firm and the leader of our property tax valuation practice, delivered a presentation to the Institute for Professionals in Taxation Northwest Regional Property Tax Seminar, which was held on August 4, 2016, in Hillsboro, Oregon.
Aaron discussed issues related to the valuation of intangible assets using the income approach. These issues include estimating a supportable long-term growth rate, assessing the reasonableness of market data in the income approach, assessing the reasonableness of normalized depreciation expense and capital expenditures, and the internal consistency of assumptions. See More

  "Discount for Lack of Marketability in the Closely Held Security Valuation”
By Robert F. Reilly, firm managing director, published in the July/August 2016 issue of the Construction Accounting and Taxation.
Robert discusses the various factors that an analyst may consider in the measurement of a discount for lack of marketability (DLOM) associated with noncontrolling interests in closely held construction companies. He also explores various empirical models for measuring the DLOM.

  Valuation: Beyond the Basics—The Five Marketability Forces and the IRS Job Aid on S Corporations
Fady Bebawy, a vice president in our Chicago office, delivered a presentation to the American College of Trust and Estate Counsel 2016 Ohio Fellows Meeting, which was held April 15-17, 2016.
Fady reviewed considerations in the estimation of the discount for lack of marketability (DLOM). He discussed the five marketability forces and how they related to the DLOM. Fady also explored the recent IRS Job Aid on S Corporations. Finally, he considered the issue of tax-affecting versus not tax-affecting. See More

  Economic Obsolescence and Market Value
Aaron Rotkowski, a vice president of our firm and the leader of our property tax valuation practice, co-delivered a presentation to the 46th Annual Taxation Conference: Appraisal for Ad Valorem Taxation of Communications, Energy and Transportation Properties, which was held in Wichita July 24-28, 2016. Aaron’s co-presenter was Michael Mangan or Tonkon Torp.
Aaron and Michael focused their presentation on the consideration of economic obsolescence within the cost approach to unit valuation for ad valorem taxation purposes. Topics included factors that contribute to economic obsolescence, appropriate methods for the estimation of economic obsolescence, and proper application of the obsolescence quantification methods. They examined the effect of economic obsolescence on the valuation of businesses for ad valorem taxation purposes. See More

  Building a Cap Rate Study: How Could Anything Go Wrong?
Robert F. Reilly, a managing director of our firm, co-delivered a presentation to the 46th Annual Taxation Conference: Appraisal for Ad Valorem Taxation of Communications, Energy and Transportation Properties, which was held in Wichita July 24-28, 2016. Robert’s co-presenter was Keith Fuqua of Colonial Pipeline Company.
Robert and Keith presented an overview of the process of developing a unit valuation capitalization rate study. They examined the procedures involved in such a study. Such procedures include consideration of the objective of the valuation analysis, development of the appropriate capital structure, development of the cost of debt rate, development of the cost of equity rate, and arriving at the final capitalization rate conclusion. See More

  "Intellectual Property Market Approach Valuation Methods in Bankruptcy Controversies”
By Robert F. Reilly, firm managing director, published in the June/July 2016 issue of the Financial Valuation Litigation Expert.
Robert discusses the various types of debtor company IP that analysts are asked to value within a bankruptcy controversy context. He summarizes the generally accepted IP valuation approaches and methods. Finally, Robert describes and illustrates a common market approach valuation method to analyze debtor company IP. See More

  "The Market Approach to Valuing Intangible Assets”
By Robert F. Reilly, firm managing director, published in the May/June 2016 issue of Valuation Strategies.
Robert discusses the various methods within the market approach that may be used to value various types of intangible assets. These methods include the sales comparison method, the relief from royalty method, and the comparable profit margin method. See More

  "The CPA Valuation Analyst and the Economic Substance Doctrine”
By Robert F. Reilly, firm managing director, published in the April 2016 issue of FVS Consulting Digest, a publication of the AICPA.
The IRS has recently stepped up its challenges of what it believes to be suspect taxpayer transactions based on the so-called “economic substance doctrine.” Analysts are often called upon to perform economic substance analyses. Robert explores some key definitions for these analyses and then reviews a few recent court decisions that dealt with this issue. See More

  "Intangible Asset Valuation Process”
By Robert F. Reilly, firm managing director, published in the March/April 2016 issue of Valuation Strategies.
The valuation process provides an overall analytical framework that assists the analyst in the collection, assessment, analysis, and interpretation of market-derived valuation evidence. Robert reviews the various steps in this valuation process. Following this process may help ensure the successful completion of the intangible asset valuation assignment.

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  "Selling Employee/Shareholder Transition Period Payments after the Construction Company Acquisition”
By Robert F. Reilly, firm managing director, published in the March/April 2016 issue of Construction Accounting and Taxation.
There has been considerable consolidation in the construction industry in recent years. In the acquisition of a construction company, it is common for the company buyers to request that any individual employee/shareholder seller agree to continue to work for the acquired construction company during a specified transition period. Issues may arise as to how these selling employee/shareholders should be compensated. Robert’s article discusses the structuring of transition payments, factors to consider when characterizing the transition payments, and legal precedent for the characterization of transition period payments.

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  "Valuation of Intellectual Property in the Marital Estate” Parts 1 and 2
By Robert F. Reilly, firm managing director, published in the Winter 2016 and Spring 2016 issues of the American Journal of Family Law.
Robert explores the types of intellectual property that may be encountered in a marital estate. He discusses the due diligence procedures that should be performed in an intellectual property valuation for divorce purposes. Robert explains the generally accepted approaches and methods used to value intellectual property. He concludes with a discussion of the procedures for reaching a valuation synthesis and conclusion.
Part 1    Part 2

  "The Five Marketability Forces Framework”
By Fady F. Bebawy, a vice president of our firm in our Chicago office, published in the January 2016 issue of Trusts & Estates.
Disputes that arise from the audit of gift tax returns often involve the selection of the discount for lack of marketability (DLOM). Fady discusses customizing the selection of the DLOM. One tool that may be used is a variation of the Michael Porter’s “Five Forces.” The five forces that may be used in selecting an appropriate DLOM are supply, demand, substitutes, turnover, and competition. Fady discusses each of these forces as they relate to the DLOM.


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  "What Lawyers Need to Know about Distinguishing Personal Goodwill from Entity Goodwill in the Closely Held Company Valuation”
By Robert F. Reilly, firm managing director, published in the Winter 2016 issue of The Practical Tax Lawyer.
In many tax-related valuations, it is often important for the closely held business owners and their advisers to allocate the total enterprise value between the company-owned entity goodwill and the individual shareholder/employee’s personal goodwill. Robert’s article summarizes what counsel need to know with regard to the elements of, the separability of, and the documentation of a shareholder/employee’s personal goodwill. This article also discusses a recent Tax Court decision: Bross Trucking v. Commissioner.


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  "Valuation of Health Care Entity Transactions,” Part One
By Robert F. Reilly, firm managing director, published in the February/March 2016 issue of Financial Valuation and Litigation Expert.
Robert’s article summarizes what analysts need to know about the regulatory considerations that affect the valuation of health care entity transfers of property and services. The article also presents analyst common misconceptions related to health care entity valuations.


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  "Distinguishing Personal Goodwill from Entity Goodwill in the Closely Held Company Acquisition”
By Robert F. Reilly, firm managing director, published in the December 2015 issue of Transaction Advisors, a monthly journal available at www.transactionadvisors.com. An extensive abstract of the article is available at https://www.transactionadvisors.com/insights/distinguishing-personal-goodwill-entity-goodwill-closely-held-company-acquisitionSee More. Subscribers may access the full text of the article.
In an acquisition of a closely held company, it is often important for the business buyers and sellers to allocate the total enterprise value between the closely held company—owned entity goodwill and the individual selling shareholder/employee’s personal goodwill. Robert’s article summarizes the analyst’s considerations with regard to the elements of, the separability of, and the documentation of a selling shareholder/employee’s personal goodwill and utilizes several key Tax Court decisions as illustration.



  Representations & Warranties Insurance—The Claims Expert’s Perspective
Shawn Fox, a managing director of our firm and the leader of our economic damages analysis practice, co-delivered a presentation along with Michael Conway, litigation partner and national business litigation practice leader at Shook Hardy & Bacon L.L.P. Mr. Fox and Mr. Conway were interviewed by Casey Zgutowicz, vice president at Lockton Companies' Chicago office.
Mr. Fox discussed key considerations in calculating economic damages on indemnification claims, accounting disputes for the buyer and seller, and the role of the forensic accountant in merger and acquisition disputes. Mr. Conway discussed the legal claims involved in situations of material misrepresentations and fraudulent misrepresentation and navigating through coverage issues under a representation and warranties policy (including definition of loss, materiality, exclusions, scope of exclusions, carve-outs, and interpretation of asset purchase agreement, among others). Lockton is a leading risk management, insurance, and employee benefits consulting services firm. This presentation can be viewed using this link: https://vimeo.com/146699664



  Separating Intangible Assets from Real Property in Real Estate Appraisals
Robert Reilly, a managing director of our firm, delivered a presentation at the 2015 Forensic and Valuation Services Conference. The conference, which is sponsored by the American Institute of Certified Public Accountants, was held November 9-10, 2015, in Las Vegas.
Robert’s presentation discussed the identification of intangible assets and various reasons to value these assets. He also explored the generally accepted intangible asset valuation approaches and methods. Robert also discussed various reasons to extract intangible asset value from the overall enterprise value. Illustrative examples were provided for the direct subtraction method, the income allocation method, and the royalty rate method..


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  Differences between a Business Valuation and an Intangible Asset Valuation
Robert Reilly, a managing director of our firm, delivered another presentation at the 2015 Forensic and Valuation Services Conference. The conference, which is sponsored by the American Institute of Certified Public Accountants, was held November 9-10, 2015, in Las Vegas.
Robert’s presentation began with a discussion of the valuation purpose and objective. He then explored various types of analyses and opinions. Robert examined the generally accepted business valuation approaches as well as the generally accepted intangible asset valuation approaches. He discussed the differences in applying the income, market, and cost (or asset-based) approaches for a business valuation and an intangible asset valuation..


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  TEC Industries Current Property Tax Issues and USPAP Update
Robert Reilly, a managing director of our firm, delivered a presentation at the 2015 Advanced Annual Property Tax Seminar. The seminar, which is sponsored by the National Association of Property Tax Representatives—Transportation, Energy, Communications, was held October 27, 2015, in Savannah, Georgia.
Robert’s presentation discussed issues related to property tax professional standards. He explored the current property tax issues related to the transportation, energy, and communications industries. And, Robert discussed recent and pending changes to the Uniform Standards of Professional Appraisal Practice.


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  "Valuation of Taxpayer Companies with NOL Carryforwards”
By Robert F. Reilly, firm managing director, and Aaron M. Rotkowski, vice president and leader of our property tax valuation practice, published in the Fall 2015 issue of The Practical Tax Lawyer, a quarterly professional journal.
During the last five to ten years, many taxpayer companies have experienced operating losses, at least periodically. This discussion describes how to consider those operating losses—and the associated NOL tax attributes—in valuations performed for property tax purposes. The article defines an NOL carryforward and an NOL carryback and explores whether an NOL carryforward should be categorized as tangible property. The article then analyzes the use of the 0 percent tax rate assumption in a valuation intended to conclude a market value estimate. It considers applying an after-tax capitalization rate to a pretax income stream. The article goes on to describe the statutory limitations on the use of a NOL carryforward and the implications of incorporating an NOL carryforward in a direct capitalization method valuation. Finally, it summarizes the factors that affect the market value of an NOL carryforward.


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  Patent Valuation: Practical Applications
Robert Reilly, a managing director of our firm, delivered a presentation at the 2015 Advanced Business Valuation Conference. The conference, which is sponsored by the American Society of Appraisers, was held October 18-21, 2015, in Las Vegas.
Robert’s presentation discussed the various types of intellectual property and reasons to analyze intellectual property. He explored the various types of patents and patent-related intangible assets. Robert discussed due diligence procedures and the various databases available for researching royalty rates. Illustrative examples were provided for each of the three generally accepted patent valuation approaches: the cost approach, the market approach, and the income approach.


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  "Structuring Transition Period Payments in Closely Held Company Acquisitions”
By Robert F. Reilly, firm managing director, published in the September 2015 issue of Transaction Advisors, a monthly journal available at www.transactionadvisors.com. An extensive abstract of the article is available at https://www.transactionadvisors.com/insights/structuring-transition-period-payments-closely-held-company-acquisitions. Subscribers may access the full text of the article.
In an acquisition of a closely held company, acquirers often ask the selling employee/shareholders to continue to provide services to the company for a transition period post-sale. This is done to ensure an efficient transition of the sellers' relationships with the company's customers, suppliers, and employees. Robert’s article discusses a number of factors a transaction advisor—and the transacting parties themselves—should consider when characterizing these payments. These factors include the transition services conditions, the proportionality of the transition payments and the target company price valuation, among others.



  "Estate of Giustina v. Commissioner”
By Christopher Silvetti, an associate in our Chicago office, published in the September 23, 2015, issue of QuickRead, a publication of the National Association of Certified Valuators and Analysts.
Christopher’s article discusses the recent decision from the Ninth Circuit Court of Appeals which reversed an earlier Tax Court decision in this matter. The case has now been remanded back to Tax Court for recalculation of its valuation of a 41.128 percent interest in the Partnership.
In its opinion, the Ninth Circuit addressed the Tax Court’s use of valuation methods, the selected weightings, the selected valuation discounts, and the selected company-specific risk premium as part of an equity cost of capital calculation. To read Christopher’s article:


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  Identification, Valuation and Extraction of Exempt Intangible Personal Property
Robert Reilly, a managing director of our firm, co-delivered a two-part presentation at the 45th Annual Appraisal for Ad Valorem Taxation of Communications, Energy and Transportation Properties Conference. The conference was held June 26-30, 2015, in Wichita, Kansas. Robert’s co-presenter was Marshall Mungle.
Part 1 of Robert’s presentation was titled “Identification and Valuation of Intangible Assets.” Robert and Marshall discussed the identification of intangible assets, reasons to value intangible assets, intangible asset property tax considerations, generally accepted approaches for valuing intangible assets. They also provided illustrative examples of the three generally accepted approaches.
Part 2 of Robert’s presentation was titled “Extraction of Intangible Assets.” In this part of the presentation, Robert and Marshall discussed reasons to extract intangible asset value, basic property appraisal accumulation and extraction procedures, common exempt property extraction procedures, and methods for intangible asset extraction from the total value. They also provided illustrative examples of the direct subtraction, income allocation, and royalty rate methods.


Part 1


Part 2