Why You Should Attend

Despite its widespread use for quantifying intangible assets, the excess earnings method (EEM), or “hybrid” or “formula” approach, remains a challenge for many appraisers. Despite its apparent ubiquity, its full range of applications and proper implementation has created doubt and confusion. In this webinar expert appraiser James Alerding leads listeners through the EEM, its history and its implementation to provide a clear understanding of how to put this valuation tool to best use.

 Agenda

• History of the Excess Earnings (Cash Flow) Method
• ARM 34
• RR 68-609
• Arthur Crandall book
• Procedures for the Excess Earnings Method (Traditional)
• Steps included in applying the method
• Should the combined discount or capitalization rate for tangible and intangible assets equal the discount rate for the DCF method?
• The Excess Compensation (Modified Approach) to the Excess Earnings Method
• Application in divorce cases
• How it works
• Relationship to personal goodwill
• Support for the use of this methodology
• Pros and Cons of the Excess Earnings method

Learning Objectives

• Learn the background and history of the Excess Earnings (Cash Flow) Method
• Learn how to apply the EEM in a valuation
• Learn how to test the reasonableness of the EEM
• Learn about the Excess Compensation Modified EEM in divorce cases
• Learn the pros and cons of the EEM

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The information, analysis and opinions expressed in the webinars, podcasts and/or congress presentations are solely those of the presenter/author, are not reviewed by the Institute as to content or accuracy, and are not endorsed by CBV Institute or any of its Members.