Valuation: the act of estimating or setting the value of something
Cunningham's valuation experience includes valuation of whole businesses, specific assets, obligations, as well as business case development using projections and scenario assessments. Jonathan Cunningham, CPA has extensive experience conducting segregations and allocations to identify and value components of larger assets and pools of assets. Cunningham Consulting provides valuation services supporting divorce, bankruptcy, taxation, buy/sell transactions and business decision making.
Business Valuation – unlike traded companies, privately held companies do not have an active market for their stock where prices are reported.The value of privately owned companies is often at issue when companies are being bought and sold, when they are community property subject to division of property in a divorce, legal damages calculations and other situations.A variety of methods exist to objectively value a business using cost, market and discounted cash flow techniques.
Asset Valuation – Often, certain assets owned by a business must be valued. Such situations arise for collateralized financing, a variety of taxation issues, bankruptcy, asset purchases and damages calculations.
Business Case Development – a clear business case is often helpful to inform major business initiatives and project expected outcomes into financial terms. Cunningham has experience formulating business cases for capital projects, performance initiatives and IT investments that tie future outcomes to operational activates and program milestones. A sound business case helps executives manage initiatives to ensure that the desired outcomes are achieved.
Divorce raises a number of financial and accounting questions as the spouses unwind their financial lives. In California, property needs to be identified and segregated into community vs individual property. Assets and businesses may need to be valued to determine equitable division. Household debt also need to be determined and dispositioned, and the tax impacts should be considered and planned in advance. Valuation services can be provided in an amicable setting in collaboration with the parties and a view to optimize tax or other personal financial outcomes. Valuation can also be provided as a forensic service when the issues are contested in court or arbitration. In some settings, financial mediation services may offer an effective and affordable way to resolve financial issues related to divorce
Complex business transactions can benefit from objective assessments of value, purchase price allocations to different asset classes, and evaluation of term payouts, financing options, and participation terms. Cunningham Consulting is skilled in providing clean buy-sell valuation opinions, valuation opinions that reflect complex terms for entire businesses, assets or special provisions as well as purchase price allocation, contingent valuations and leveraged purchases.
Financial Reporting and Taxation
Correct calculation of income and other taxes often requires valuation work. Cunningham Consulting provides valuation opinions to support management's estimates and a variety of Federal, State and Local tax and compliance questions including valuation of Plant Property and Equipment, Inventory, Receivables, support for transfer pricing issues, MACRS segregation, and financial instruments.
Representative Valuation Engagements
ESTIMATE OF INSURABLE VALUE - Insurable value for a mixed use office, retail and hotel development was estimated using the cost approach. Historical costs to develop the property were segregated to exclude certain items of personal property, foundation and site work. The remaining historical cost of construction was adjusted for inflation, as well as functional and economic obsolescence.
VALUATION OF AN AUTOMOTIVE MANUFACTURING PLANT - Valued an automotive manufacturing plant at $6.8 million to support buyer’s acquisition bid. Valuation projected historical unit direct and indirect costs, selling costs, overhead and financing costs through a variety of market and competitive scenarios.
SUPERMARKET - Performed a construction engineering analysis to assign cost components of a newly constructed supermarket to MACRS property classifications for federal income tax purposes. Approximately 20% of the capitalized construction cost was assigned to personal property and approximately 30% assigned as land improvements, resulting in approximately $170,000 in benefits on an NPV basis.
MEDICAL OFFICE BUILDING - Performed a construction engineering analysis to assign cost components of a newly constructed Medical Office Building to MACRS property classifications for federal income tax purposes. Approximately 25% of the capitalized construction cost was assigned to personal property and approximately 15% assigned as land improvements, resulting in approximately $350,000 in benefits on an NPV basis