Outlook for Growth in Business Valuation


By Eva Lang - How broad is the current economic slowdown and is it affecting business valuation firms? Two recent items give us some insight into how economic conditions are affecting BV work.

On May 7, 2008, the American Society of Appraisers published in the ASA BV E-Letter, the results of an informal poll of ASA BV practitioners. According to Bill Quackenbush, the editor, 57 percent of the respondents expected 2008 billings to be higher than prior years, and only 6.5 percent thought 2008 would be down in terms of billings. The larger the firm, the more likely billings were expected to be up in 2008. Litigation firms similarly expected growth, but only a little more than other types of practitioners. Those from the Southwest and Mid-Atlantic were the most optimistic regarding growth; those from the Northeast the most pessimistic.

On May 8, 2008, Duff & Phelps Corporation in the first quarter earnings conference call with a number of top analysts, talked about how fair value accounting is driving growth. Duff & Phelps Corporation (DUF) is a publicly traded independent financial advisory company. It operates in two segments, Financial Advisory and Investment Banking. The Financial Advisory segment offers valuation advisory services. Revenues in this segment were up 26% in the first quarter. The segments billing rate rose 3.8% to $326 per hour during the same period.

In this call (transcript available at Seeking Alpha) , CEO Noah Gottdiener started out by noting that growth was “being driven by broad market trends that continue to increase in importance, especially in light of the current economic environment. In particular, the current volatility in the financial markets underscores the need for greater transparency, the move towards fair value accounting, and demands for independence.” He then specifically mentions “major corporate clients are hiring us to value their investment portfolios, particularly with respect to instruments such as auction-rate securities. Our FAS 142 impairment valuation practice, a key component of our valuation advisory services business, continues to see lift in today’s environment. And not surprisingly, litigation appears to be increasing, particularly with respect to valuation and liquidity issues.” Noah went on to state that in terms of long-term growth goals, he expected to see 15% organic growth.

Things continue to look good for the valuation profession with new opportunities ahead despite a shrinking economy.

This blog

by Eva Lang - Eva Lang, aka BV Girl, is a member of the AICPA Business Valuation Hall of Fame. Eva discusses hot topics, practice management concerns, and technology issues that affect business valuation and litigation support practices.

More from this blog

Bloggers crew

Steve Knowles has spent 25 years in business and practice in the UK, but he also worked in the states and the years haven't dulled his way of seeing an alternative view to everyone else, and every day is a new adventure.

42569

Joel M. Ungar, CPA is a lifelong resident of the Detroit area and a graduate of The University of Michigan. He is a principal with Silberstein Ungar, PLLC, a Top 15 auditor of SEC public reporting companies.

74831

Allan Boress, CPA, with over 25 years as a practitioner and consultant to the accounting profession. Mr. Boress is the author of 12 published books in 6 different languages, including a best-seller, The "I-Hate-Selling" Book.

47539

Larry Perry, CPA, CPA Firm Support Services, LLC, is the author of accounting and auditing manuals, author and presenter of live staff training seminars, and author of webcast and self-study CPE programs. He blogs about small audits, reviews, and compilations.

87315
Sandra Wiley, COO and Shareholder, is ranked by Accounting Today as one of the 100 Most Influential People in Accounting as a result of her prominent role as an industry expert on HR and training as well as influence as a management and planning consultant. She is also a founding member of The CPA Consultant's Alliance. Sandra is a certified Kolbe™ trainer who advises firms on building balanced teams, managing employee conflict and hiring staff.
19993

Maria Calabrese, CIR, Human Resources manager for Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC in Cranford, New Jersey, Maria's topics revolve around the world of: Mentoring, Performance management, and The "Y Generation," a.k.a. "The whY generation".

54665

William Brighenti is a CPA, Certified QuickBooks ProAdvisor, and Certified [Business] Valuation Analyst, operating an accounting, tax, and QuickBooks consulting firm in Hartford, Connecticut, Accountants CPA Hartford.

79373

Ken Garen, CPA, is the co-founder and President of Universal Business Computing Company (www.ubcc.com), a software development firm of high-volume, high-productivity accounting and payroll technology.

24569

Eva Rosenberg, MBA, EA, is the publisher of TaxMama.com, and author of the weekly syndicated Ask TaxMama column. She provides answers to tax questions from taxpayers and tax professionals worldwide.

63083

Amy Vetter, CPA, CITP is the CPA Programs Leader for Intacct Corporation responsible for leading the CPA/BPO Partners nationally.

33955
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
101168
Scott H. Cytron, ABC, is president of Cytron and Company, known for helping companies and organizations improve their bottom line through a hybrid of strategic public relations, communications, marketing programs and top-notch client service. An accredited consultant, Scott works with companies, organizations and individuals in professional services (accounting, finance, medical, legal, engineering), high-tech and B2B/B2C product/service sales.
25260

Rita Keller is a nationally known CPA firm management consultant, speaker, author, mentor and blogger. She has over 30 years hands-on experience in CPA firm management, marketing, technology and administrative operations.

51531
Stacy Kildal is the mom of two fantastic kids, an Advanced Certified QuickBooks ProAdvisor, Certified Enterprise Solutions ProAdvisor, Sleeter Group Certified Consultant, a nationally recognized member of the Intuit Trainer and Writer Network, and co-host of RadioFree QuickBooks.
27103
Michael Alter's blog specializes in providing practical advice to those who seek greater profitability and practice management tactics that enhance deeper client relationships.
31395

Sally Glick, CMO, Principal, Marketer of the Year in 2003 and AAM Hall of Famer in 2007, leads a lively discussion of the constantly expanding roles of marketing and the professional marketers that drive this initiative in accounting firms of all sizes.

98645

The IMA Young Professionals Blog features the insights of IMA’s Young Professionals Committee. Committee members share advice and experiences on careers, continuing education, work/life balance, and other issues affecting young accounting and finance professionals.

32586

FEI Financial Reporting Blog provides highlights from SEC, PCAOB, FASB, IASB, and other regulatory news, including reporting under Sarbanes-Oxley Sect 404. It is written by Edith Orenstein, Director of Technical Policy Analysis at FEI.

109514

Sue Anderson has 30 years of experience in continuing education for accountants. Currently she is the program director for online CPE provider CPE Link.

59832

Jim Fahey is COO of Apple Growth Partners, a regional CPA firm in Ohio. His focus is on the effective and efficient use of technology within the firm by all team members.

38612
Caleb Newquist is the Editor-in-Chief of Sift Media US, overseeing content for both AccountingWEB and Going Concern.
65574

Leita Hart-Fanta, CPA, CGFM, and CGAP is the author of "The Yellow Book Interpreted" and owner of Yellowbook-CPE.com a website devoted to training for governmental auditors.

91444

AccountingWEB is more than just a U.S. team of journalists and financial and technology experts - we have an international side, too! Members of our British team who publish AccountingWEB.co.uk share their ideas, insights, and perspectives from across the pond.

52536