Gary R. Trugman is a Certified Public Accountant licensed in the states of Florida, New Jersey, and New York (inactive). He holds the AICPA's Accredited in Business Valuation (ABV) credential and is a Master Certified Business Appraiser (MCBA) as designated by the Institute of Business Appraisers, Inc. He also is an Accredited Senior Appraiser (ASA) in Business Valuation by the American Society of Appraisers. Gary is regularly court-appointed and has served as an expert witness in federal and state courts throughout the United States, testifying on business valuation, matrimonial matters, business and economic damages, and other types of litigation matters.

Gary is the Chairman of the Constitution and Bylaws Committee, past-chair of the Ethics Committee, past-chair of the Business Valuation Education Subcommittee, and a past elected member of the Business Valuation Committee of the American Society of Appraisers. Gary lectures nationally on business valuation topics. He is the author of a textbook entitled Understanding Business Valuation: A Practical Guide to Valuing Small to Medium-Sized Businesses, now in its 5th edition, and an e-book entitled Essentials of Valuing a Closely-Held Business, both published by the American Institute of CPAs. He also has developed numerous educational courses, including but not limited to, a six-day valuation educational series and a seminar entitled Understanding Business Valuation for the Practice of Law for the Institute of Continuing Legal Education. Gary also serves as an editorial adviser for the Journal of Accountancy, The CPA Expert, Business Valuation Update and formerly for National Litigation Consultants' Review and the CPA Litigation Service Counselor. He has lectured in front of numerous groups and has been published in the Journal of Accountancy, Fair Share and The CPA Litigation Service Counselor.

Gary was born in New York and received his undergraduate degree from The Bernard M. Baruch College of the City University of New York. He was the first business appraiser in the United States to earn a master's in Valuation Sciences from Lindenwood College. His master's thesis topic was "Equitable Distribution Value of Closely Held Businesses and Professional Practices." Gary's appraisal education also includes various courses from The Institute of Business Appraisers, the American Society of Appraisers, the American Institute of CPAS and others offer. He has taught federal income taxation at Centenary College, financial statement analysis in the master's degree program at Linderwood Collete, and several topics at the AICPA National Tax School in Champaign, Illinois. Gary was an adjunct professor teaching a valuation course at Florida International University. He is a member of The Institute of Business Appraisers Inc., the American Society of Appraisers, the American Institute of CPAs, the Florida Institute of Certified Public Accountants and the New Jersey Society of Certified Public Accountants.

Preface v

CHAPTER 1 Overview of Business Valuation 1

CHAPTER 2 Business Valuation Standards 5

CHAPTER 3 Getting Started 9

CHAPTER 4 Valuation Principles and Theory 13

CHAPTER 5 Data Gathering 19

CHAPTER 6 Data Analysis 25

CHAPTER 7 Statistics for Valuation and Economic Damages 41

CHAPTER 8 Developing Forecasts for Business Valuations and Economic Damages 45

CHAPTER 9 The Market ApproachPart I 47

CHAPTER 10 The Market ApproachPart II 63

CHAPTER 11 The Asset-Based Approach 67

CHAPTER 12 The Income Approach 73

CHAPTER 13 Discount and Capitalization Rates 85

CHAPTER 14 Premiums and Discounts (Valuation Adjustments)Part I 93

CHAPTER 15 Premiums and Discounts (Valuation Adjustments)Part II 97

CHAPTER 16 Revenue Ruling 59-60 101

CHAPTER 17 The Valuation Report 103

CHAPTER 18 Valuation of Pass-Through Entities 107

CHAPTER 19 Valuation in Financial Reporting 109

CHAPTER 20 Valuing Intangible Assets: An Overview 111

CHAPTER 21 Estate and Gift Valuations 119

CHAPTER 22 Divorce Valuations 123

CHAPTER 23 Professional Practice Valuations 125

CHAPTER 24 Ownership Disputes 127

CHAPTER 25 Other Valuation Assignments 131

CHAPTER 26 Economic Damages 137

CHAPTER 27 My Favorite Court Cases 139

CHAPTER 28 Interactive Case Study 141

Solutions 239