By Harold G. Martin, Jr., CPA/ABV/CFF, ASA, CFE, Director
Insights on business valuation and classification of property for equitable distribution
Harold G. Martin, Jr., Keiter Valuation and Forensic Services Director, shared his insights on business valuation in divorce in the article, “‘D-I-V-O-R-C-E’ (Apologies To Tammy Wynette)”, featured in VSCPA’s Disclosures magazine.
Excerpt
“Unfortunately, in more than 40 percent of marriages, country songs such as Tammy Wynette’s “D-I-V-O-R-C-E” present a real-life storyline. When these matters involve ownership by one of the parties in a closely held business, CPAs may assist as consultants or serve as expert witnesses in litigation to quantify the value of the propertied spouse’s interest. This article presents an overview of the applicable Virginia statutes, case law and professional standards, as well as the key concepts with which a CPA should be familiar when valuing a business and classifying property for equitable distribution in divorce.”
Article Highlights
- While the Code of Virginia defines “equitable distribution” of assets in divorce, it does not specifically define a standard for determining a spouse’s interest in a closely held business.
- Case law provides a standard of value for determining a spouse’s interest, but it is inconsistent. The landmark case often cited as the basis for standard of value for divorce in Virginia is Bosserman v. Bosserman.
- The three recognized valuation approaches (income, market and asset) should be considered for purposes of valuing the properties spouse’s ownership interest in divorce, though there are nuances to each.
Questions on business valuation and classification of property for equitable distribution in divorce? Contact our Valuation and Forensic Services Team. 804.747.0000 | Contact Us.
Additional Insights on Valuation in Divorce
- Tracing Investment Accounts in Divorce
- Who Gets the Family Bible? Division of Hybrid Property in Divorce
- Who Gets the Family Bible? Division of Hybrid Property in Divorce – Part II
About the Author
Harold G. Martin, Jr., CPA/ABV/CFF, ASA, CFE, Director
Harold G. Martin, Jr., is a Director in Keiter’s Valuation and Forensic Services Group. He has over 40 years of experience and specializes in valuation and forensic accounting, including financial investigations and litigation consulting and expert witness services. He is a frequent speaker and writer on valuation topics.
More Insights from Harold G. Martin, Jr.The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.
