Capital Gains

The treatment of the trapped in capital gains in the valuation of holding companies

The Treatment of the Trapped in Capital Gains in the Valuation of Holding Companies

The issue of how to treat the trapped in capital gains most often shows up when applying the Adjusted Net Asset Approach to valuing a holding company. The Adjusted Net Asset Value Approach is typically used when valuing a real estate or investment holding company. This approach results in the book value of the assets and liabilities being restated to reflect their fair market value. The adjusted net book value of the Company is then …

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