BV191-WEB - Determining Discounts for Lack of Marketability
Category: Business Valuation
Continuing Education: 1
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Webinar Course Description
Business appraisers have historically used
comparisons to the averages found in restricted stock studies to determine discounts
for lack of marketability in their appraisals of a privately held,
noncontrolling interests. While the average discounts from restricted stock studies are
useful and indicate that discounts for lack of marketability do occur in arm’s
length transactions, more analysis is needed to apply the underlying data to
the valuation of privately held minority interests. This 1 hour webinar
will review the top methods used to determine discounts for lack of marketability
and provide practical objective methodologies for listeners to consider to
calculate discounts that can be supported by more than pointing to an average in a study.
Recommend Pre-Reading
Business Valuation Update, Vol 19, No. 3, March 2013, "Empirical Method
for Determining DLOM."
Course Audience
CPAs, attorneys, and business valuation professionals
NASBA and Continuing Professional Education (CPE) Credit
The American Society of Appraisers is registered with the National
Association of State Boards of Accountancy (NASBA) as a sponsor of continuing
professional education on the National Registry of CPE Sponsors. State boards of
accountancy have the final authority on the acceptance of individual courses for
CPE credit. Complaints regarding registered sponsors may be submitted to the
National Registry of CPE Sponsors through its website www.learningmarket.org.
CPE Credit: One (1) Hours in Specialized Knowledge
Program Level:
Fundamental
Delivery Method: Group-internet based courses are approved for
CPE
Prerequisites: None
Advanced Preparation: None
Policies: ASA's
Refund and Cancellation Policy and ASA's Complaint Resolution Policy
Instructor Information
Bruce Johnson , ASA | Munroe, Park & Johnson, Inc.
Bruce A. Johnson, ASA is a partner with Munroe, Park & Johnson. He holds
a degree in Engineering and MBA from Texas A&M University. Mr. Johnson has
been published on a wide range of valuation topics in several periodicals
including the Texas Bar Journal, Business Valuation Update, Business Valuation
Review, CCH BV Update, Texas Lawyer and Strategic Planning. He is also a
contributing author for PPC’s Guide to Business Valuation and a co-author of the
Comprehensive Guide for the Valuation of Family Limited Partnerships. He was the
expert witness for the taxpayer in two land mark tax cases – Estate of Elsie J.
Church and Estate of Emily Klauss. Mr. Johnson is an Accredited Senior Appraiser
of the American Society of Appraisers (ASA) and elected member of the ASA’s
Board of Governors. He has spoken at seminars, conferences and webinars
for the AICPA, ASA, NACVA and Partnership Profiles.
No prerequisites for this course.
Agenda
The following topics are covered in this course:
1. What is a Discount for Lack of Marketability
2. What Does a DLOM do -
means vs. ends?
3. What are the Top 4 methods used by practioners?
4. How
can I support the DLOM that I have determined?
Learning Outcomes
Upon completion of this course,students will be able to:
- Understand why discounts for lack of marketability occur;
- Develop a knowledge of the leading edge techniques for calculating
DLOMs;
- Determine and evaluate what data is available to support DLOMs;
- Learn why the rate of return of an investment is more important than the
total discount;
- Learn how investors value publicly held limited partnership interests in
arm’s length transactions?; and
- Quantify, calculate and defend a discount for lack of
marketability.