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An Inexact Science; The debate between "art" and "science" in valuation assessments continues to rage on.

Publication: Mergers & Acquisitions: The Dealmaker's Journal
Publication Date: 01-JUL-09 		Format: Online
Delivery: Immediate Online Access

Article Excerpt
Byline: Avram Davis

Nobody ever said valuation services was easy work. The undying battle between valuation firms and their sometimes nonplussed clients usually stems from disagreement over what an asset is worth. Of course, it's the companies that hire the valuation firms, which gives them the upper hand in a fight that promises to have no winners.

Throughout the past year, the conflict has only intensified, as a result of severe valuation adjustments brought on by the credit dislocation and mark-to-market accounting practices. In addition, the creative accounting employed by companies like IT consultant Satyam appears to have prompted a sea change in the direction these arguments are moving.

Congress, the Securities and Exchange Commission and FINRA have all recently focused on developing specific valuation standards, and the private equity community for years has tried to tackle standardized metrics for valuation. Any development...

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