Challenges to Professional Practice Valuation
One of the reasons the valuation of professional practice can be so challenging is that much of the value is in the individual’s contribution, not in merchandise or interests that can be easily divided. Office furniture, outdated computer equipment, business libraries, and accounts receivable seldom add up to the true value of the practice — the value brought by community goodwill developed from the intellectual and physical endeavors of the business owner.
When we handle a business valuation, we conduct extensive discovery. The business owner must often provide an extensive list of financial information. The owner must provide tax information, financial statements, balance sheets, and reports. For professional practices, business owners must also produce counts of previous, existing, and expected patients, practice demographics reports, and equipment lists.
Whether or not the business owner has a controlling interest is also a significant issue, potentially changing the value of a business from nothing to a significant amount.
Business valuation experts may also be called upon to lend their opinions and to help make an accurate analysis. Stange Law Firm, PC, has the resources to handle even the most complex family law disputes. In complicated matters, we often work with experienced professionals, like accountants and financial planners, to help our clients achieve the best possible results in family law proceedings. For more information on this topic, you can also read an article by Kirk C. Stange titled: Business Valuation Basics in Divorce.
Accountants and financial experts use IRS Revenue Ruling 59-60 to value closely held corporations or the stock of corporations where market quotations are not available. This ruling outlines the general approaches, methods, and factors to be considered in valuing professional practices and businesses.
Contact Our Multi-State Family Lawyers for Help Valuing Your Professional Practice or Business in Missouri, Illinois, Kansas, Oklahoma, or Nebraska
You can read more information on this topic in an article titled: Valuing a business: the role of an experienced attorney.
To learn more about our approach to high-asset property division, contact us online or by phone to schedule a confidential consultation at any of our convenient locations. We have locations in St. Louis, Chicago, Kansas City, Springfield, Columbia, Wichita, Topeka, Oklahoma City, Tulsa, Omaha, Lincoln, and beyond.
