Standards of value : theory and applications

Content: Foreword xiii     Preface xvii     Acknowledgments xxi     About the Authors xxv     Introduction 1     Purpose 1     Every Appraisal Is Unique 3     Fair Value versus Fair Market Value 4     Historical Perspective 5     Chapter Preview 8     Chapter 1: Common Standards and Premises of Value 8     Chapter 2: Fair Market Value in Estate and Gift Tax 8     Chapter 3: Fair Value in Shareholder Dissent and Oppression 9     Chapter 4: Standards of Value for Partnership and Limited Liability Company Buyouts 10     Chapter 5: Standards of Value in Divorce 12     Chapter 6: Fair Value in Financial Reporting 13     How Standard of Value Can Affect the Ultimate Conclusion of Value 13     Chapter 1 Common Standards and Premises of Value 17     Common Standards and Premises 17     Price, Value, and Cost 17     Defining a Standard of Value 19     Premises of Value 20     Common Standards of Value 21     Fair Market Value 21     Fair Value 23     Investment Value 24     Intrinsic Value 25     Book Value 27     Common Operational Premises Underlying the Standard of Value 28     Going Concern 28     Liquidation Value 29     Fair Value in Alternative Contexts 30     Fair Market Value in Alternative Contexts 31     Standards of Value in the International Context 32     Summary 33     Chapter 2 Fair Market Value in Estate and Gift Tax 35     Introduction 35     Common Definitions of Fair Market Value 36     History of Fair Market Value 37     United States v. Fourteen Packages of Pins 38     Elements of Fair Market Value 41     Price at Which a Property Would Change Hands 42     Willing Buyer 44     Willing Seller 54     No Compulsion to Buy or Sell 59     Reasonable Knowledge of Relevant Facts 63     Common Discounts 80     Summary 87     Chapter 3 Fair Value in Shareholder Dissent and Oppression 89  Gilbert E. Matthews and Michelle Patterson     Fair Value as the Standard of Value in Dissent, Oppression, and Entire Fairness Cases 89     The Appraisal Remedy for Dissenting Shareholders 94     History and Overview of the Appraisal Remedy 94     Appraisal Rights Today 97     Appraisal Rights in Publicly Traded Corporations: The Market Exception 99     Fair Value Can Be Less Than Arms   -Length Price 102     The Oppression Remedy 106     Development of the Oppression Remedy 106     Context of Oppression Remedy 107     Dissolution as a Remedy for Oppression 110     Shareholder Buyouts as an Alternative Remedy 110     Examples of Oppression 116     Fair Value Is the Standard of Value in Appraisal and Oppression in Almost All States 121     Fair Value as Defined by Various Authorities and Statutes 121     The Valuation Date   Before the Effectuation of the Corporate Action to Which the Shareholder Objects 125     Valuation Date in Appraisal Cases 125     Valuation Date in Oppression Cases 126     Customary and Current Valuation Techniques 130     Fair Value in Delaware 139     Delaware Fair Value Standards 139     Entire Fairness in Delaware 140     Components of Fair Value in Delaware 144     Ohio   s Unique and Unfavorable Standard of Value in Appraisals 155     Fair Value Normally Excludes Discounts and Premiums 157     Most States Now Reject Minority and Marketability Discounts 157     Levels of Value 159     Discounts at the Shareholder Level 160     The    Implicit Minority Discount    163     No Premiums Are Applicable to DCF Values 167     Discounts at the Corporate Level 168     Control Premiums at the Corporate Level 169     Some States Permit Considering Extraordinary Circumstances in Determining Whether to Apply Discounts 171     Court Decisions Have Moved toward Rejecting Discounts 172     Equitable Adjustments to Fair Value 188     Consideration of Wrongdoing in Calculating Fair Value 188     Damage Claims 193     Summary 194     Chapter 4 Standards of Value for Partnership and Limited Liability Company Buyouts 197  Noah J. Gordon     Introduction 197     Buyout upon Dissociation 198     Buyout in Lieu of Dissolution 199     Dissenters    Rights 200     Partnerships and Limited Liability Partnerships (LLPs) 200     Limited Liability Partnerships 201     General Partnership Standard of Value Cases 212     Limited Partnerships 216     Limited Liability Companies, Generally 222     Uniform Acts 223     Buyout in Lieu of Dissolution 224     Withdrawal and Buyout 228     Dissenters    Rights 231     Professional LLCs 232     LLC Decisions 232     Summary 235     Chapter 5 Standards of Value in Divorce 237     Introduction 237     Marital Property: General Background and History 240     Identification of Marital Property and Separate Property 242     Relationship between Valuation and Identification of Intangible Assets 244     Appreciation on Separate Property 246     Premises and Standards of Value in Divorce 249     Premises of Value 249     Standards of Value 250     Premises of Value Revealed through the Valuation of Insurance Agencies 255     Concepts of Value under the Two Premises 257     Standards of Value in Divorce among the 50 States 258     Lack of Statutory Insight 258     Revealing Standard of Value through Case Law 260     Toward a Standard of Value Classification System 265     Value in Exchange 274     Goodwill 274     Lack of Control and Marketability Discounts under Value in Exchange 290     Fair Value 293     Buy   Sell Agreements under Value in Exchange 299     Value to the Holder 304     Goodwill 304     Double Dipping 315     Shareholder-Level Discounts under the Value to the Holder Premise 317     Fair Value 317     Buy   Sell Agreements under Value to the Holder 318     Summary 320     Chapter 6 Fair Value in Financial Reporting 323  Neil J. Beaton     Introduction 323     Fair Value in Financial Reporting: What Is It? 324     Application of Fair Value 325     History of Fair Value in U.S. Accounting Literature 328     Application of the Fair Value Standard to Business Combinations 333     Application of the Fair Value Standard to Asset Impairment Tests 336     Interpretation of Fair Value Compared to Other Standards of Value 339     Fair Value in Financial Reporting versus Fair Value in Dissenters    Rights Cases 339     Fair Value in Financial Reporting versus Investment Value 339     Fair Value in Financial Reporting versus Fair Market Value 340     Audit Issues 342     Summary 343     Appendix: Sources of Information 344     Appendix A International Business Valuation Standards 347     Introduction 347     International Valuation Standards Council 347     Valuation Organization 348     Broad Definitions 350     Approaches to Valuation 351     Types of Property 352     Toronto Valuation Accord 353     Mission and Objectives 354     Definitions 355     Fair Value Measurement 356     Conclusion 357     Royal Institute of Chartered Surveyors 358     International Financial Reporting Standards 358     Appendix B Chart    Fair Value in Dissent and Oppression 359     Appendix C Standards of Value in Divorce Classifications by State and Standard of Value 377     Index 443