Discounts and premiums must be supported with empirical data September 2001 Discounts or premiums are the most important money issue in many business valuation cases, but many reports conclude values for discounts or premiums with insufficient empirical support. This column tells you what standards exist, and how to obtain them for your files.
Clients usually rely on attorneys to select valuation experts.
Therefore, it seems incumbent on attorneys who may be given this responsibility to be familiar with the requirements to achieve the various credentials that may be proffered as qualifications for business appraisal expertise. In litigating value disputes, it is essential that both the lawyer and the appraiser be aware of any statutory or case law definition of value that may be applicable. In creating controlling contractual documents, it is essential that the lawyer make clear the applicable definition of value. In this column, I will present the basic concepts, in terms of both definition and measurement, and I will give you some of my own opinions as to how I believe that personal versus enterprise goodwill should be valued. Valuing a Business , 4th ed. and The Lawyer s Business Valuation Handbook .