Understanding Business Valuation: A Practical Guide to Valuing Small to Medium Sized Businesses, 4th Edition
Written by Gary Trugman, Understanding Business Valuation: A Practical Guide to Valuing Small-to Medium-Sized Businesses, simplifies a technical and complex area of practice with real-world experience and examples. Trugman's informal, easy-to-read style covers all the bases in the various valuation approaches, methods, and techniques. Readers at all experience levels will find valuable information that will improve and fine-tune their everyday activities.
Topics include valuation standards, theory, approaches, methods, discount and capitalization rates, S corporation issues, and much more. Author’s Note boxes throughout the publication draw on the author’s veteran, practical experience to identify critical points in the content. This edition has been greatly expanded to include new topics as well as enhanced discussions of existing topics.
Steps of an Appraisal xxi
Notation System Used in This Book xxi
Chapter 1 Overview of Business Valuation 1
Chapter 2 Business Valuation Standards 17
Chapter 3 Getting Started 61
Chapter 4 Appraisal Principles and Theory 101
Chapter 5 Data Gathering 117
Chapter 6 Data Analysis 157
Chapter 7 Statistics for Valuation and Economic Damages 223
Chapter 8 Developing Forecasts for Business Valuations and Economic Damages 237
Chapter 9 The Market ApproachPart I 285
Chapter 10 The Market ApproachPart II 347
Chapter 11 The Asset-Based Approach 387
Chapter 12 The Income Approach 409
Chapter 13 Discount and Capitalization Rates 441
Chapter 14 Premiums and Discounts (Valuation Adjustments)Part I 501
Chapter 15 Premiums and Discounts (Valuation Adjustments)Part II 531
Chapter 16 Revenue Ruling 59-60 621
Chapter 17 The Valuation Report 633
Chapter 18 Valuation of Pass-Through Entities 661
Chapter 19 Valuation in Financial Reporting 691
Chapter 20 Valuing Intangible Assets: An Overview 711
Chapter 21 Estate and Gift Valuations 751
Chapter 22 Divorce Valuations 775
Chapter 23 Professional Practice Valuations 841
Chapter 24 Shareholder Disputes 907
Chapter 25 My Favorite Court Cases 965
Chapter 26 Economic Damages 1001
Appendix 1 AICPA Statement on Consulting Services Standards 1
Appendix 2 ASA Standards
Appendix 3 NACVA Professional Standards
Appendix 4 International Glossary of Business Valuation Terms
Appendix 5 SSVS 1 Appendix C
Appendix 6 Revenue Ruling 59-60
Appendix 7 Revenue Ruling 65-192
Appendix 8 Revenue Ruling 65-193
Appendix 9 Revenue Procedure 66-49
Appendix 10 Revenue Ruling 68-609
Appendix 11 Revenue Procedure 77-12
Appendix 12 Revenue Ruling 77-287
Appendix 13 Revenue Ruling 83-120
Appendix 14 Revenue Ruling 85-75
Appendix 15 Revenue Ruling 93-12
Appendix 16 Technical Advice Memorandum 94-36005
Appendix 17 Private Letter Ruling 91-50001
Appendix 18 Business Valuation Resources
Gary R. Trugman is a Certified Public Accountant licensed in the states of New Jersey, New York (inactive), and Florida. He is Accredited in Business Valuation (ABV®) by the AICPA and is a Master Certified Business Appraiser (MCBA) as designated by the Institute of Business Appraisers Inc. He is also an Accredited Senior Appraiser (ASA) in business valuation by the American Society of Business Appraisers. Gary is regularly court appointed and has served as an expert witness in federal court and state courts in several jurisdictions, testifying on business valuation, business and economic damages, and other types of litigation damages.
Gary is currently the chairperson for business valuation education for the American Society of Business Appraisers and serves on its ethics committee. He was presented with the Volunteer of the Year Award by the AICPA in 2011 for outstanding service for furthering the goals of the business valuation profession. Gary has previously served on the AICPA’s ABV Examination Committee, the AICPA’s subcommittee working with the judiciary, the ABV credentials committee, the executive committee of the management consulting services division, and the business valuation and appraisal subcommittee. He is the past president of the Florida Institute of CPAs’ litigation and business valuation committee and was formerly on the New Jersey Society of Certified Public Accountants’ litigation services committee, business valuation subcommittee (past president), and matrimonial committee.
Gary is the former chairman of the ethics and discipline committee, formerly served on the qualifications review committee, and is the former regional governor of the mid-Atlantic region of the Institute of Business Appraisers Inc. He has received a Fellow Award from the Institute of Business Appraisers Inc. for his many years of volunteer work in the profession. Gary has also received an AICPA Hall of Fame Award for his service to the accounting profession in assisting in the accreditation in the business valuation process. Gary formerly served on the international board of examiners of the American Society of Appraisers. He is currently a faculty member of the National Judicial College and an adjunct professor at Florida International University.
Gary lectures nationally on business valuation topics. He is the author of several publications and courses published by the AICPA. He has also developed numerous educational courses, including, but not limited to, a six-day business valuation educational series and the seminar “Understanding Business Valuation for the Practice of Law” for the Institute of Continuing Legal Education. Gary also serves as an editorial adviser for the Journal of Accountancy and the CPA Expert and formerly for National Litigation Consultants’ Review and the CPA Litigation Services Counselor. He has lectured in front of numerous groups and has been published in the Journal of Accountancy, Business Valuation Update, FairShare, and the CPA Litigation Services Counselor.
Gary was born in New York and received his undergraduate work from the Bernard M. Baruch College of the City University of New York. He was the first business appraiser in the United States to earn a master’s in valuation sciences from Lindenwood University. His master’s thesis topic was “Equitable Distribution Value of Closely Held Business and Professional Practices.” Gary’s appraisal education also includes various courses offered by the Institute of Business Appraisers, the American Society of Business Appraisers, the AICPA, and others. He has taught federal income taxation at Centenary College, financial statement analysis in the master’s degree at Lindenwood University, and several topics at the AICPA National Tax School in Champaign, Illinois. He is a member of the Institute of Business Appraisers, the American Society of Appraisers, the AICPA, the Florida Institute of CPAs, and the New Jersey Society of Certified Public Accountants.