How To Measure Business Success Using the Balanced Scorecard Model

Many businesses (as well as tax professionals) are very good at compiling financial information. Most have decent systems in place to gather, compile, and summarize the financial information collected. Yet, many times, unfortunately, it is the only set of metrics that organizations use to determine their success. Finance is only one piece of the story of an organization’s success. In truth, good financial standing is really a function of doing many other things in the organization well — if you don’t have a robust product or service, or if you consistently frustrate and drive off customers and employees, you will…

Weighing the Pros and Cons Of Holding Foreign Real Estate – It’s Not For Everybody

If you have ever thought of owning foreign real estate, but have doubts of its merits, this post is going to outline some of the primary benefits that ownership of offshore real estate entails. It will also shed some light on the common pitfalls that Americans may encounter when acquiring offshore real estate. Whether foreign real estate is purchased for recreational purposes, like owning a second vacation home, or it is used to help diversify one’s portfolio, a legal offshore real estate investment can be a viable option for some US citizens, but it certainly isn’t for everybody. The primary…

3 Stages of a Real Estate Development Project and Accounting Implications

Accounting for real estate development projects under generally accepted accounting principles (GAAP) demands knowledge of regulatory requirements from various accounting bodies; bodies like the Accounting Principles Board, Emerging Issues Task Force, Financial Accounting Standards Board, and American Institute of Certified Public Accountants (AICPA), to name a few. The costs accrued with the development of a project are accounted in different ways, depending on the nature of the costs and the stage of the project. Some costs are expensed as period costs, some are capitalized when incurred as costs of the project, while others are recorded as prepaid expenses and expensed…

Private Companies Ramp Up Capital Spending

Optimism in the U.S. economy is triggering increased capital spending at private companies, according to a new report from PricewaterhouseCoopers. Over half (59%) of private-company leaders are optimistic about U.S. economic prospects for the next 12 months, according to PwC US’s latest Trendsetter Barometer. More than one-third of them plan major new capital investments, the highest percentage in over two years. PwC’s Trendsetter Barometer incorporates the views of 205 C-suite executives (CEOs and CFOs): 118 from companies in the product sector and 87 in the service sector, averaging $355 million in enterprise revenue/sales and including large, $500 million-plus private companies….

Valuation Confirms Salability of ‘Unique’ Restaurant’s Goodwill

Brave v. Brave, 2014 Ark. LEXIS 232 (April 17, 2014) What a difference a court makes! A divorce case involving a successful restaurant made news several months ago when the state Court of Appeals extended the scope of personal goodwill to businesses other than professional partnerships, requiring the trial court to exclude the value of the husband’s personal goodwill from its calculation. To block a revaluation, the wife appealed to the state’s highest court, which reviewed the trial court’s determination as if the appeal had been filed with it in the first case. EBITDA valuation. At divorce, the husband and…

Court Drills Down on No-Sale Assumption for Dental Practice DLOM

Barnes v. Barnes, 2014 Tenn. App. LEXIS 200 (April 10, 2014) A recent nasty divorce case centering on the husband’s dental practice offers up a number of interesting valuation questions, including whether the final valuation was subject to a marketability discount (DLOM) and whether there was enterprise goodwill. The practice had two dentists—the husband and an associate dentist—as well as nine other full-time employees. In 2003, the husband received an offer for $913,000, but he declined to sell the practice, and in 2006 he signed a net worth statement that claimed the practice had a value of $1 million. Serious…