HomeArticlesIntroduction to Business Valuation Concepts for Attorneys
Introduction to Business Valuation Concepts for Attorneys
By Thomas Kalajian: Business valuation is a broad and technically challenging discipline. This article presents several key concepts, with the perspective of attorneys in mind, to provide a conceptual introduction of business valuation.
One of the most important aspect of the divorce relates to property division, and business valuation. Some key Business valuation concepts for attorneys.
By Thomas Kalajian, Valuation Analyst
Business valuation is a broad and technically challenging discipline. This article presents several key concepts, with the perspective of attorneys in mind, to provide a conceptual introduction of business valuation.
Thomas Kalajian is a registered tax accountant and Accredited Valuation Analyst, and holds the advanced designation of Accredited in Business Appraisal Review. He was awarded the distinction of Best Accredited in Business Appraisal Review Qualifying Report of 2010. Mr. Kalajian is the principal appraiser with Provident Valuation Professionals, Inc. which provides business valuation and legal consulting services throughout Southern California from its Orange County administrative center.
Expert opinion from fact testimony is distinguished by the observance of professional standards. Performing a business valuation involves special knowledge, skill and experience. Different organizations have different standards. Not all standards are applicable to every appraiser, yet quite often two or more sets are applicable to an individual expert who is multi-credentialed or publicizes membership (even candidacy for a designation) in several organizations.
n my 21 years as a business valuator in family law cases, an issue frequently arises related to the interplay between the business valuation methodologies applied and the business owner’s salary resulting in associated support obligations (I will use the term “support” to include both maintenance and child support payments in this article). Lovingly been termed the “double dip,” the short definition of this issue is counting the same income stream twice: once for division of property and the other for determination of support.
In divorce, you cannot determine how big a slice your client should get until you know the size of the marital pie. For business owners, self-employed spouses, and high-net-worth individuals, we can trace and calculate a party’s true income and assets, the tax liabilities that may follow those assets, and suggest a plan for equitable distribution. If the other side fails to produce documents, we can impute income for alimony and child support calculations. We prepare requests for production of financial statements and documents, and also prepare responses to opposing counsel’s requests for productions.
Diana Shepherd is the Editorial Director of Family Lawyer Magazine and Divorce Magazine. An award-winning editor, published author, and a nationally-recognized expert on divorce, remarriage, finance, and stepfamily issues, she is a frequent lecturer on the topics of divorce, finance, and marketing – both to local groups and national organizations. She has also been a Certified Divorce Financial Analyst® since 2006.
