Are you a business owner in the middle of a divorce trial and would like to take measures to safeguard your interest in court? If so, then you would do well to consider the services of a business valuator. Why is this so?
To better understand how a business valuation expert can prove invaluable in divorce proceedings, it would be best to learn a few things about what they can do for you. Only then can you decide whether it is worth your time and money.
Determine reasonable compensation
A business assessment typically requires the specialist to make changes to the subject company’s income statement. This process is called “normalisation.” Balancing the company’s financial statements permits the valuators from reputable firms like the “Rushmore Group” to compare the subject company to other firms in the same geographic area and market. Among the most common normalisation adjustments is the owner’s payment, which might be increased or decreased to show market levels.
Match Property Value with Current Market
Another typical normalisation adjustment is “change books.” Tangible assets like property, stocks, and equipment must be adjusted to their market price if a “book value” or “excess earnings” is to be found. Most business owners are not appraisers, so it is important to engage a business valuation expert in creating a strong case in court.
Changing Lease to Market
If the business pays a lease to owners or other insiders, the amount might be greater or lower than the market. The safest path is to hire an appraiser to give an estimate of reasonable rental worth.
Taxes and Transaction Expenses – The majority of divorce courts have not resolved the problem of whether to “tax-affect” the incomes of a Subchapter “S” corporation. Another issue is whether to subtract taxes and transaction expenses from the theoretical proceeds that a business owner may get upon the sale of the firm. Thus you will need a business valuation expert to allocate the selling price and perhaps even give an opinion about broker’s charges. It is an unknown area for most business owners, and those who venture on without the help of a business valuation expert might just end up walking onto a minefield (figuratively speaking).
Would you like to learn more? Check out other reputable sources on the web similar to what you can find at http://rushmoregroup.com.au/ . They ought to be able to tell you everything you need to know about the services of a business valuation expert.