IRS Revenue Ruling 59-60 is an essential building block of modern business valuation practice. It identifies “the condition and outlook of the specific industry” as one of the factors to consider when valuing a private business. But how do investors measure industry risk and how does it fit in the valuation paradigm? Value is a function…
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Timing Is Everything: How to Handle Subsequent Events in Valuation
Similar to balance sheets, business valuations are prepared as of a specific date. Sometimes a valuation’s effective date is in the past, and events have occurred after the valuation date that would have impacted the company’s value if investors knew (or could have known) about them beforehand. Such retrospective valuations are common in litigation and…
Coming Soon: Changes to the 401(k) Plan Participation Rules
Years ago, employers could exclude part-time employees — those who work less than 1,000 hours per year in the business — from participating in 401(k) plans. That was before the Setting Every Community Up for Retirement Enhancement (SECURE) Act became law in 2019. The old rules made life simpler for small employers that preferred to avoid…