Search:
NOT LOGGED IN
BVR's Guide to Discounts for Lack of Marketability

This page is for demo purposes only, and some links aren't turned on. If you are a subscriber please login. To purchase this guide and start your subscription click here.

BVR's Guide to Discounts for Lack of Marketability



Preview the Table of Contents & Excerpt from BVR's Guide to Discounts for Lack of Marketability (Feature Enhanced PDF)

This guide was created with a feature enhanced PDF, which will allow you to use extra features such as bookmarking pages and making notes. To download the PDF, click on the cover image or title.


For a list of links to full texts of court case opinions related to DLOM, click on the heading below.

Martial Dissolution

Bankruptcy Cases

Dissenting or Withdrawing Shareholder Cases

Employee Stock Ownership Plan (ESOP)

Gift, Estate and Income Tax

Minority Oppression and Judicial Dissolution

Miscellaneous

  Updates

8/06/2009
DLOM is Valuation-Date Specific, New Study on LEAPS Put Options Shows

The risk of loss in value over time is a major component of the discount for lack of marketability. The risk can be measured by the cost of publicly traded, long-term put options (LEAPS). Our new study, Minimum Marketability Discounts–4th Edition: A Study of Discounts For Lack of Marketability Based on LEAPS Put Option, shows that costs of price protection/discounts vary by date. They are not constant in size over time. That result suggests that a discount for lack of marketability analysis should be valuation-date specific. In addition, as the Mandelbaum case described, discounts vary by company size and risk and by industry. Purpose of the study. The objective in studying LEAPS is to contribute to improved substantiation of the discount for lack of marketability, which has long been a concern of both valuation practitioners and courts. The data collected in this and an earlier study (both available at www.dlom-info.com) enable us to understand how liquidity discounts vary. Read more.

Feedback? Email - guides@bvresources.com



Listen to:
Discounts for Lack of Marketability and Related Discounts Highlights from the October 2008 Teleconference with Brian Pearson and commentary from Stuart Weiss
(Click to Play - Runtime: 5 min)



  DLOM In The News
Note: News feeds are automated and not screened for accuracy or applicability
8/31/2010
Transferring Your Family Business to Your Children - NewsReleaseWire.com (press release)
8/30/2010
LEO SHINN C. LIU v. ANGELA CHIEN JU TSAI - Leagle.com
8/25/2010
MacMurray Whale: Find Energy Catalysts, Find Growth - Oakshire Financial
8/11/2010
IN RE ESTATE OF JENSEN - Leagle.com
8/18/2010
Brocade Reports Fiscal Q3 Results - MarketWatch (press release)
8/9/2010
Is the divorce valuation “business” picking up again? - BVWire News
8/9/2010
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND ... - Insurance News Net (press release)
8/12/2010
Gifts and sales combined to determine applicable discount - Lexology (registration)
8/30/2010
Why Apple's stock actually looks cheap - MacDailyNews (blog)
8/9/2010
ITEM 2-MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS ... - Insurance News Net (press release)
  DLOM In The BVWire
8/11/2010
Get your DLOM questions answered today, August 11, from three of the best. Chris Mercer (Mercer Capital), Kevin Yeanoplos (Brugemman and Johnson Yeanoplos) and James Lurie (Cap-Val LLC) lead the discussion in "Everything You Always Wanted To Know About DLOM But Were Too Afraid To Ask," a BVR...
Issue #95-2

8/4/2010
Despite the volume of work written and presented on discounts for lack of marketability (DLOM), many appraisers still have questions about the subject: * "Am I using the best method, given the valuation assignment?" * "If using QMDM, will a holding period have any affect?" * "Are...
Issue #95-1

7/21/2010
Brian Pearson (Valuation Advisors LLC), developer of the Valuation Advisors' Lack of Marketability Discount Study, updated listeners on his pre-IPO database last week in a BVR webinar. The Valuation Advisors DLOM Study database, which currently has over 4,300 transactions, is a valuation tool that...
Issue #94-2

6/9/2010
This topic came up for heated debate in a great DLOM Case Study analysis run by Kevin Yeanoplos (Brueggeman and Johnson Yeanoplos) and Jim Lurie (CapVal) at the NACVA/IBA conference last week in Miami. "In some cases, management may tell you that they’ll never sell, or they may say they plan to...
Issue #93-1

5/12/2010
Business appraisers "can expect to see a lot of new ideas and concepts, models that are no longer used, and models that haven’t been used but are popping back up," Jim Hitchner (Financial Valuation Advisors) told attendees at the AAML/AICPA conference in Las Vegas. One area in which appraisers...
Issue #92-2

5/5/2010
In their 2008 whitepaper, "Why IPOs are in the ICU," (BVWire™# 75-3), authors David Weild and Edward Kim (both from Grant Thornton) charted the slow demise of the IPO market. The pair recently updated their study in "Market Structure is Causing the IPO Crisis." Among their current findings...
Issue #92-1

3/10/2010
Courts are continually asking for more accurate, empirical data in determining discounts for lack of marketability. Tax Court judges, in particular, have become more sophisticated when it comes to valuation issues and are more likely to reject simple averages or medians calculated over a specific...
Issue #90-2

2/10/2010
If you did a valuation at the end of last year—and you did it the same way you did it in the years prior to the current recession, "you came up with a very, very wrong number," says John Barton, chair of the American Society of Appraisers (ASA) BV Committee. The impact of traumatic economic...
Issue #89-2

12/2/2009
Perhaps nothing in business valuation is more controversial than the discount for lack of marketability (DLOM). This one adjustment can have a sizable impact on clients' tax obligations. So, naturally, one question frequently lingers in attorneys' minds at the end of estate-planning engagements...
Issue #87-1

12/2/2009
Conceived by a small and committed group of valuation professionals, the newly created Fair Value Forum (FVF) addresses fair value accounting and "its significant role in changing the standards of practice within the business valuation industry." Based in Silicon Valley, CA but with a membership...
Issue #87-1



  DLOM In The Blogs
Note: Blog feeds are automated and not screened for accuracy or applicability
Second Circuit Finds No Code §2036 Inclusion of Residence in ...
It is interesting to note that the parties in this case stipulated to a 42.5% discount for lack of control and lack of marketability. Tags: Code section 2036, Estate Tax, discounts, gift of residence, implied agreement, ...
Tools I Do Not Use: A Personal Opinion | Institute of Business ...
By the same token, I do not use the option-related models for quantifying the lack of marketability discount because their output ranges are so wide: I get narrower and better results by benchmarking and double-checking with the QMDM. ...
Court Case – Suzanne J. Pierre, Petitioner v. Commisioner of ...
After discussing each discount in turn, the Court determined that a lack of control discount of eight-percent (8%) and a thirty-percent (30%) discount for lack of marketability were warranted on the transfers of the two 50% LLC member ...
Hyper-Precision | Institute of Business Appraisers
An attorney engaged in unbelievable word-smithing of a valuation report, quarreling over the placement of commas and demanding precision in the estimates of uncertain market data (such as the benchmark for lack of marketability discounts). ... To insist on precision to the penny per share or 1 basis point in a discount rate is impossible to obtain because of these uncertainties. Values are almost always a range of reasonable values or even a probability distribution, ...
Business Valuation Methods; Insights on Insurance Agency Valuation ...
Business Valuation Concerns: Discount for Lack of Marketability (“DLOM”). Arguably this the most important discount in any company valuation. In insurance agency valuations it is probably the one most easily attacked. ...



Copyright © 2010 Business Valuation Resources, LLC. All rights reserved.
(888) BUS-VALU, (503) 291-7963   Privacy Policy   Top of Page

Accessed: Friday, 9/3/2010 4:24:36 AM.