Nearly all business appraisers are familiar with valuing Family Limited Partnerships through the use of valuation discounts. The traditional methodology employs the use of both the Asset-based and Market Approaches to Value. The Non-Marketable Investment Company Evaluation (NICE) Method is an Income Approach to value and does not rely upon valuation discounts. The NICE method is designed especially to determine the fair market value of interests in FLP's by taking into account investment risks and embodying them into the appropriate cost of capital for the subject interest. The NICE method relies upon Modern Portfolio Theory to solve for the price at which the willing seller and willing buyer would transact for the interest in view its risks and expected returns. This is, in fact, what investors in the marketplace actually do every day.

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*Disclaimer: The opinions expressed in this presentation are that of the presenter(s) and do not necessarily reflect the views and opinions of the American Society of Appraisers.

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