Level IV – Special Topics in Business Valuation
By moving through the Introductory, Intermediate and Advanced valuations courses, you have developed your skills and knowledge in valuation theory and methodology. The purpose of this course is to extend your learning to a number of additional specialized topics, each of which signiﬁcantly (and regularly) impacts CBVs in real-world practice. By gaining knowledge in these areas, you will be best prepared for the interesting and varied challenges that you will face when you practice as a CBV.
Module 1 focuses on law, and provides you with information on legal topics that will be important for you to know as a CBV. Here, you will learn about various terminologies, agreements and legal concepts present in both corporate and litigation-related work.
By the end of Module 1, you will be able to:
- Discuss the characteristics of a contract.
- Identify when a breach of contract has occurred, with reasoning, and discuss the potential remedies for a breach of contract.
- Discuss diﬀerent categories of torts.
- Identify when a tort has occurred, with reasoning, and discuss the potential remedies for a tort.
- Discuss the tort of negligence.
- Identify when a tort of negligence has occurred, with reasoning.
- Discuss how various legislation and types of agreements may impact value with respect to the deﬁnition of value and liquidity.
- Understand the rights of minority shareholders and creditors, identify when a breach of such rights has occurred, and discuss the potential remedies for such breaches.
Corporate Reorganizations are a very important area of work for CBVs, and are expected to further expand as the baby boom generation continues to transition businesses (either to their children or others), and as accountants and tax planners become more proactive in advising clientele to pursue tax eﬀective corporate structures — all of which usually require reasonable attempts at value determination. Module 2 will introduce you to this area.
By the end of Module 2, you will be able to understand the sections of the Income Tax Act relating to corporate reorganizations, and how a CBV might become involved in engagements dealing with such matters.
Unless you choose to practice solely in public corporate matters (ﬁnancial reporting, large mergers, etc.), you will likely be retained in litigation matters, such as family law, shareholder disputes, damage quantiﬁcation and other litigious-type matters. Module 3, which focuses on the “CBV as an Expert” provides necessary background into the issues to keep in mind when being retained as an expert.
By the end of Module 3, you will be able to:
- Describe the Canadian court system and litigation process, including the diﬀerent roles which a CBV may fulﬁll in the litigation process.
- Discuss best practices for acting as an expert witness.
Delving further into litigation concepts, Module 4, on “Quantiﬁcation,” walks you through methodology and theory behind calculating various types of losses in litigation matters. Certain concepts are developed fully in this course, while others are developed further in the Litigation Support in Business Valuation course. However, at the end of this course, you will have a rudimentary knowledge of the various approaches and matters to consider when quantifying losses.
By the end of Module 4, you will be able to:
- Explain the diﬀerence between damages in tort vs. breach of contract, and recognize situations in which such damages have occurred.
- Discuss diﬀerent types of damage awards.
- Discuss conditions and situations which may give rise to ﬁnancial losses.
- Discuss diﬀerent types of ﬁnancial loss (i.e., heads of damage), and recognize situations in which a quantiﬁcation of ﬁnancial loss may be necessary.
- Describe how liability is established in breach of contract and tort cases.
- Discuss the principles behind damage quantiﬁcation for breaches of contract or tort.
- Perform professional and technically correct loss quantiﬁcation calculations, including interest awards.
- Explain the tax treatment of damages and litigation awards.
Module 5 “Other Topics,” introduces you to various matters that may be less theoretically onerous but are nevertheless just as important in a CBV’s practice. This module introduces several specialized areas of litigation which are covered in more detail in the Litigation Support in Business Valuation course. Other topics addressed include earn-outs, taxation of damage awards, ESOPs and public company matters (going private transactions and accretion/dilution analysis).
By the end of Module 5, you will be able to:
- Describe how a CBV may be involved in family law, personal injury/wrong death, or wrongful dismissal cases.
- Discuss the beneﬁts and process of a corporation going private.
- Explain MI 61-101 transactions, including their purpose, the types of transactions to which they may apply, and the rules (i.e., CICBV Practice Standard) with respect to valuations required for transactions covered by MI 61-101.
- Discuss fairness opinions, including their purpose, the types of transactions to which they may apply, and the rules (i.e., CICBV Practice Standard) with respect to valuations required for transactions covered by fairness opinions; and perform professional and technically correct calculations which may be incorporated in a fairness opinion.
- Explain the characteristics and purposes of an earn-out, and perform a professional and technically correct calculation of such.
- Explain the characteristics and purposes of an employee stock ownership plan, and perform a professional and technically correct calculation of value of such.
Finally, you are provided with ﬁve assignments that are crucial to your understanding of the material in this course. Assignment number three is a comprehensive case study (“Stuﬀ R Us”). It is strongly recommended that you make an earnest attempt to complete these assignments, and then review the solutions to ensure you have grasped the material. Success in the ﬁnal exam is highly dependent upon fully understanding the suggested solutions to the assignments.
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