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   The International Association of Certified Valuation Specialists

Valuation News Updates

04-05-2022 19:31 | Lisa Guo (Administrator)
  • TAF issues exposure draft regarding conclusion of value vs. value calculations

    In the first in a series of valuation briefs, The Appraisal Foundation (TAF) has published an exposure draft, “Understanding the Differences: Conclusion of Value v. Value Calculations.” TAF’s Business Valuation Resource Panel wrote the draft. A copy of the exposure draft is available if you click here.

    Feedback wanted: Comments on the exposure draft are due by May 26. To submit a comment, TAF has a special form that is available if you click here. The comment submission form notes that all written comments will be published for public viewing, exactly as submitted, on TAF’s website, but names may be redacted upon request.

    If you have questions or need assistance, please contact Jalin Debeuneure at

    Experts in, lay witnesses out in damages case

    In a Michigan case, there were a number of motions to exclude expert witnesses in a damages case that involved employee poaching in the automotive industry. The motions were granted with respect to lay witnesses but denied (or partially granted) with respect to damages experts, as follows:

  • The defendants’ motion to exclude the plaintiff’s industry expert was denied (the expert had over 40 years of experience in the industry and would testify as to industry customs and practices);
  • The plaintiff’s motion (in limine) to preclude the defendant from presenting expert testimony from lay witnesses was granted (they were employees of the defendant);
  • The defendants’ motion to exclude testimony of the plaintiff’s owner as an expert was granted (he can testify as to his own personal experiences but not as to industry customs and practices);
  • The defendants’ motion to exclude the plaintiff’s damages expert was denied (he was not a CPA or had business valuation credentials, but he was a JD/MBA who had testified in a number of damages cases); and
  • The plaintiff’s Daubert motion to exclude specific expert testimony from the defendant’s expert was granted in part (he was an ASA and CVA who would be a rebuttal expert to the plaintiff’s damages expert).
  • The case is Auto Konnect, LLC. v BMW of North America, LLC, 2022 U.S. Dist. LEXIS 42345, and a case analysis and full opinion are available on the BVLaw platform.

    Extra: There are proposed changes to strengthen Rule 702, which is the federal rule of evidence regarding testifying experts. See the April 2022 issue of Business Valuation Update for details.

    Twitter’s brand value soared prior to Musk’s bid

    The brand value of Twitter increased by 85% to US$5.7 billion this year, even before the takeover attempt by Elon Musk, according to an analysis by Brand Finance. This “provides strong underlying support for Musk’s apparent investment thesis that significant improvements to revenue are possible,” the report says. Other findings in the report include:

  • Google retains the title of world’s most valuable media brand, at US$263 billion;
  • Chinese social media giant WeChat is the strongest media brand in the world, with an elite AAA+ brand rating;
  • TikTok/Douyin is the highest new entrant in the Media 50 2022 ranking, valued at US$59 billion; and
  • Technology brands constitute 66% of the total brand value in the ranking.

The full Media 50 2022 report is available if you click here.

Extra: Professor Aswath Damodaran (New York University Stern School of Business) gives his analysis of Musk’s bid for Twitter in a blog post.

Becoming an industry expert—from the ground up

Some valuation analysts become expert in certain industries by chance—they get some engagements in a particular sector and learn along the way. Others, such as Bryce Erickson (Mercer Capital), do it from the ground up and in a very deliberate way. Erickson has been involved in hundreds of valuations and related engagements since 1988 and has developed a specialty in the energy sector. He publishes research related to the oil and gas industry and is a regular contributor to Mercer Capital’s blog Energy Valuation Insights and the energy sector of During a recent webinar, he recounted that, early in his career, he was with a merchant bank, making unsecured loans to oil and gas companies. He started to take continuing education courses on oil and gas at a local university. He also listened to earnings calls by public companies to learn the jargon. He spent hundreds of hours reading. With a good base of knowledge, he started to take engagements, and his learning continued. You may make some mistakes and “take your lumps,” but you’ll be in a much better place with a solid understanding of the industry.

Extra: Speaking of the energy sector, plan to attend the 2022 Houston ASA Energy Valuation Conference: A BVR Live Webcast, a full-day event on May 12. This is the 12th year for this event, and it will present leading-edge valuation techniques applicable to all sectors of the energy industry.

Free model helps take DCF a step further

In an article “Analytical Insights From DCF Value Analysis,” the authors include a free model business valuers can use to take their “DCF calculation a step further and analyze the resulting value into four components.” Their four components of value each represent the value contribution from different periods, and they are: (1) current operating value; (2) short-term growth value; (3) medium-term investment value; and (4) long-term franchise value. The objective of the authors (from The Footnotes Analyst) is to show that “there is more to DCF than simply an explicit forecast and a terminal value and that, by analyzing value in this alternative way, additional insights can be obtained.” The authors include an explanation of the model and the underlying math in “Interactive Model: Target Enterprise Value Multiples.”

New trends help eateries build business

Virtual restaurants—commercial kitchens that operate through delivery services and do not have a physical dine-in space—are increasing due to the coronavirus pandemic, reports the Vertical IQ industry research platform in a recent “Coronavirus Update” for the restaurant industry. These operations may be extensions of existing brick-and-mortar restaurants or startups using rented kitchen space. The need to replace lost revenue combined with a greater emphasis on carryout and delivery is driving growth. Industry experts say that full-service operators that were already experimenting with off-premises options before the pandemic were best positioned to capitalize on the model.

Extra: A spin on this concept is the “ghost franchise,” such as MrBeast Burger, that has no physical locations—it contracts with local restaurants to make its burgers and fries, which are 100% delivery only (using third-party delivery apps).

Global BV News

Free webinar series from the IVSC June 2-10

Kroll is sponsoring a series of webinars presented by the International Valuation Standards Council (IVSC) from June 2 through June 10. The IVSC Valuation Webinar Series will present panel discussions from leading international experts on topics including the global economic outlook, the impact of inflation on valuation and the cost of capital, and the growing influence of digital assets in the investment world. Speakers include IVSC chair and former UK Chancellor of the Exchequer, Alistair Darling; Kroll chief economist and Financial Times columnist, Megan Greene; IMF Global Markets chief and former IOSCO deputy chair, Ranjit Singh; Corporate Reporting Users’ Forum (CRUF) chair, Jeremy Stuber; PwC global asset and wealth management leader, Olwyn Alexander; UCLA emeritus professor of finance, Bradford Cornell; and many others. For details and to register, click here.

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