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Understanding Business Valuation: A Practical Guide to Valuing Small to Medium Sized Businesses, 4th Edition

Understanding Business Valuation: A Practical Guide to Valuing Small to Medium Sized Businesses, 4th Edition

Gary R. Trugman

ISBN: 978-1-119-44866-2 November 2017 1168 Pages


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.

Introduction xix

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 Approach—Part I 285

Chapter 10 The Market Approach—Part 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

Index 1117



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