the business appraiser surviving cross examination
DESCRIPTION
How the business appraiser should prepare for and survive cross-examination.TRANSCRIPT
SO YOU THINK WE DON’T CHECK?
SURVIVING CROSS-EXAMINATION OF THE APPRAISAL EXPERTA Lawyer’s Point of View©
Business Valuation Resources and the American Society of Appraisers Present:Divorce: A Hands On Workshop for BV Practitioners
What Do Lawyers Do With a Business Valuation Report?
The Opposing Lawyer’s Job
Discredit the Business Valuation Report
Discredit the Business Appraiser
Business Valuation Resources and the American Society of Appraisers Present:Divorce: A Hands On Workshop for BV Practitioners
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How Lawyers Do Their Job
We Read And Critically Analyze Every Word of the Report
Nothing is Accepted at Face Value
Nothing is True Until Proven to Be True
Business Valuation Resources and the American Society of Appraisers Present:Divorce: A Hands On Workshop for BV Practitioners
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The Lawyer’s Deconstruction of the Business Valuation Report
1. Is the Appraiser’s CV Accurate?
2. Are there Typographical, Mathematical or Computational Errors?
(“Death by a Thousand Cuts”)
3. Is there any Plagiarism?
4. Has the Appraiser Complied with Applicable Business Valuation Standards and Ethical Rules?
5. Has the Appraiser Complied with Applicable State Law?
6. Did the Appraiser Correctly Apply the Selected Methodology?
Business Valuation Resources and the American Society of Appraisers Present:Divorce: A Hands On Workshop for BV Practitioners4
The Lawyer’s Deconstruction of the Business Valuation Report
7. Is the Data Used Accurate and Sufficient to Support the Opinion of Value?
8. Did the Appraiser Retain the Required Documentation in the Work File?
9. Did the Appraiser make Appropriate Financial Statement Adjustments?
10. Is the Economic and Industry Data Utilized Reliable?
11.Did the Appraiser Conduct a Site Visit and Management Interview?
12.Does the Appraisal Report Indicate Bias or Advocacy?
Business Valuation Resources and the American Society of Appraisers Present:Divorce: A Hands On Workshop for BV Practitioners
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The Keys to Bullet Proofing Your Business Valuation
Report and Testimony
1. THE DEVELOPMENT AND DOCUMENTATION OF THE
OPINION OF VALUE
2. THE WRITING OF THE REPORTBusiness Valuation Resources and the American Society of Appraisers Present:
Divorce: A Hands On Workshop for BV Practitioners
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Document The Work File
Include Everything
Do Not Purge the Work File
Do Not Communicate by Email
Keep the Work File Organized
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Business Valuation Resources and the American Society of Appraisers Present:Divorce: A Hands On Workshop for BV Practitioners
Have Absolute Knowledge of the Relevant Facts
1. Conduct Due Diligence Interviews
A. Verify Company History/background
B. Verify Company Financial Information
2. Conduct a Site Visit
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Business Valuation Resources and the American Society of Appraisers Present:Divorce: A Hands On Workshop for BV Practitioners
Double Check the Data 1. Reporting and Use of National, Regional and Local Economic Information
2. Reporting and Use of Comparables
3. Don’t Use Material from Internet Sources that is Not Validated by Other Unimpeachable Sources
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Business Valuation Resources and the American Society of Appraisers Present:Divorce: A Hands On Workshop for BV Practitioners
The 4 Worst Report Writing Errors
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a) Hedge Words & Equivocation
b) Use of Generalities
c) Use of Absolutes
d) Assumption and Presumptions
:Business Valuation Resources and the American Society of Appraisers Present:
Divorce: A Hands On Workshop for BV Practitioners
Report Writing Errors
Error No. 1
Hedge Words & Equivocation
• “It is Not Unreasonable to Believe….”
• “It Can Be Recognized That…..”
• “On Average”
• “ For The Most Part”
• “It Appears to Be” & “Apparently”
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Business Valuation Resources and the American Society of Appraisers Present:Divorce: A Hands On Workshop for BV Practitioners
Report Writing Errors
• Error No. 2
• Generalities
–“In General”
–“Commonly Recognized”
–“ The Valuation Professional”
….“Uses” or “Recognizes”
–“ Substantially….(“More/Less”)
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:Business Valuation Resources and the American Society of Appraisers Present:
Divorce: A Hands On Workshop for BV Practitioners
Report Writing Errors
Error No. 3
Absolutes
– “Obvious” or “Obviously”– “Conclusive” or “Conclusively”– “Self-evident”– “Industry Rule”– “The Majority Position”
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Business Valuation Resources and the American Society of Appraisers PresentDivorce: A Hands On Workshop for BV Practitioners
Report Writing Errors
• Error No. 4• Assumptions & Presumptions
• Danger! Danger! Danger!
• “It is Assumed”• “It is Presumed”• “It is Believed”
• “It is Understood”• “It is Implicit That…”
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Business Valuation Resources and the American Society of Appraisers PresentDivorce: A Hands On Workshop for BV Practitioners
Do Not Plagiarize
• Plagiarism is:a) Copying what somebody else has written
b) Taking somebody else’s idea and trying to pass it off as original
c) Something copied from somebody else’s work or
idea that somebody presents as his or her own
(MSN Encarta Dictionary 2006: English (North America).
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Business Valuation Resources and the American Society of Appraisers Present:Divorce: A Hands On Workshop for BV Practitioners
The Top 4 “Don’ts”
1. Don’t Make Yourself Vulnerable to “Death by A Thousand Cuts”
2. Don’t Make Report Writing Errors
3. Don’t Fail to Document the Work File
4. Don’t plagiarize
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Business Valuation Resources and the American Society of Appraisers Present:Divorce: A Hands On Workshop for BV Practitioners