This article addresses whether appraisers should be using midyear or end-of-year present value factors. Although this is a topic that other authors and I have addressed, this article has some unique and novel approaches to the topic. The mathematics in this article accounts for cash flow growth within and between years rather than between years only, as others have modeled. We model in both discrete and continuous time, with discrete time in multiple time frames, almost continuous, daily, monthly, quarterly, and annual cash flows. Our continuous time results are very surprising. We conclude that, absent strong seasonality, midyear annual cash flows are very accurate and very little difference is seen in valuation results between quarterly, monthly, daily, and continuous cash flows. They are all close to midyear Gordon model multiple results.

This article introduces the use of the Gerber statistic when performing a Monte Carlo simulation for cases when two or more random inputs are correlated. When interdependent random variables violate certain standard assumptions required for use of the traditional historical Pearson correlation matrix, the Gerber statistic can provide a better estimate of correlation and, consequently, of the value of the subject asset. This article examines the strengths and weakness of the Gerber method relative to the traditional method and provides an example of how to apply the Gerber method, assuming that the two correlated random variables violate one or more assumptions related to the Pearson correlation coefficient.

I hope this issue finds you all well.First, a few updates.The American Society of Appraisers has posted on its website updates to Valuing a Business, 6th edition, the current edition of Shannon Pratt's original primer on business valuation and one of the world's most respected valuation references. The updates posted include the following:The ASA announced it will be providing periodic updates to the resources and appendix to VAB6; the appendix and future updates are available at https://www.appraisers.org/shop/publications-and-subscriptions/books/valuing-a-business/appendix.Also, data on the Implied Private Company Pricing Line (IPCPL) are no longer being updated on the BVResources.com web site. The Business Valuation Review released the first article by Bob Dohmeyer and Peter Butler on the Implied Private Company Pricing Line in 2012, and subsequent articles were published on the topic in the Business Valuation Review and Business Valuation Update. Business Valuation Resources provided data for business valuation professionals to employ the IPCPL, which until recently was available at BVResources.com and was accessible through their cost-of-capital center. This information is no long being updated, but the old resources are still accessible through BVResources.com.In this issue, Joseph Thompsom and Paul Skluzak explore control premiums using decisions from the Delaware Court of Chancery. Also, Barry Cunningham provides some insights as to a real estate appraiser's consideration of property rights as well as the impact of this on the valuation of intangible assets. And, last but not least, Erin Hollis provides a current business valuation case law update. Thanks to all of our authors for sharing their insights.As always, we invite our readers to submit articles on new or interesting content, such as case law updates such as that provided by Erin, practical tips like those provided by Barry, or general observations. Feel free to e-mail me (kgarcia@finresearch.com) any thoughts for articles or letters you may have, and I will be happy to discuss those with you.Please enjoy this issue.

This article provides the business appraiser with a better understanding of how real estate appraisers think about property rights and the distinctions they make between fee simple and leased fee estates. It also discusses two areas where a property rights issue could lead to understating intangible assets in real estate centric entities. Two brief case studies are used to demonstrate where problems can arise and how to resolve them. This is a primer to foster more in-depth discussion in future papers from the appraisal community.

The valuation industry has utilized the concepts of control premiums and corresponding discounts for lack of control (DLOC) for decades. There has been considerable debate regarding the application of control premiums paid to acquire public companies, given the likely existence of synergies embedded within those premiums. This article analyzes implied control premiums using Delaware Court of Chancery (the “Court”) decisions in which the Court determined the fair value of the shares of formerly public companies. While this article is not intended to endorse the use of adjusted acquisition premiums when calculating a control premium or DLOC, it provides empirical support for the concept that acquisition premiums likely include synergistic elements and that an appraiser should consider downward adjustments for this issue.

Thank you for being a subscriber of the Business Valuation Review (BVR). This long-standing publication of the American Society of Appraisers has been in existence since Spring 1982 and was previously titled Business Valuation News until 1985. It has historically been published four times a year and is a journal of diverse valuation topics that range from the traditional to the controversial to the very esoteric. Authors are typically esteemed practitioners or academics.Over the past ten years or so, we at the ASA have struggled with the idea of continuing BVR in its traditional print publication or permanently move to an online-only electronic format or continue the hybrid formula we currently utilize of print and online. A handful of years ago, to keep current with the times, we moved to strictly electronic delivery of the publication. However, member feedback led us to revert back to print while keeping our online edition.But where do we go from here? Should we maintain the publication in print? Should the format retain its academic and clinical stature? Or do we mix things up and possibly change the publication to something more commercial and general?ASA surveyed the membership for their feedback toward the end of 2022. The results of that survey have led us to put together a task force to make decisions on our publication. The task force will be charged with the following:Eventually all things in life need a tune-up or perhaps an entire transformation. Going forward, we at the ASA want what is best for our members and the readers of BVR. If you have any feedback or suggestions, please email me at erin@erin-hollis.com. I believe BVR is ASA's legacy to the business valuation industry. It's not an easy read and it's not for everyone, but it's a tradition our business valuation members are proud of.