Businessman working from home discussing what home office expenses can be claimed.

How Working from Home May Affect your 2020 Tax Return

COVID-19 has caused many significant changes in how Canadians live their lives. One noteworthy difference for office employees is that many may find themselves working from home for a substantial portion of the year. This change in routine may give rise to new costs that these employees must bear. Some of the more apparent costs could be computer monitors, desks, or keyboards purchased to facilitate working from home. But there are also additional, more subtle …

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Business woman exploring the valuation of her business.

7 Reasons why an Up-to-Date Valuation is an Asset to your Business

Many business owners only obtain a valuation of their business when they are considering a sale, or reacting to an unforeseen situation. But there are benefits to always having an up-to-date valuation in hand. It’s a proactive measure that ensures you are acting from a position of strength when the unexpected does happen. Why you should have a current valuation of your business: You are ready if you receive a purchase offer for your business …

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Cash Flow methods used to determine Business Valuation

How your Business Value is Determined using the Income Approach

The income approach is often the primary approach used for valuation and is used in the valuation of most operating companies.  The income approach discounts the expected future cash flows (returns on investment) to present value using an appropriate rate of return for the investment. Future cash flows are typically based on the net after-tax cash flows expected to be generated by the business. The discount rate (or rate of return) used should reflect the degree of uncertainty or …

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Capital gains trapped in globe sitting on business valuation papers

How to Treat 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 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 …

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Cash flow analysis and impact on business valuation during COVID-10 pandemic.

What Is The Impact Of COVID-19 On Business Valuation Approaches?

This article discusses the effect of COVID-19 on valuation methodologies as discussed in a Webinar hosted by the American Society of Appraisers (ASA). The panelists included ASA’s, ABV’s, CBV’s and CFA’s from Canada, United Kingdom and United States. Valuation Methodology Income Approach valuation methods include the Discounted Cash Flow and Capitalization of Cash Flow analysis. Discounted Cash Flow Analysis In the Discounted Cash Flow analysis, future cash flows are discounted to present value using an …

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Guidelines companies are used to help estimate the value of a private business.

What Is The Best Market Approach Valuation Method For Your Business?

Under the market approach, appraisers use guideline companies to help them estimate the value of a private business. With so many companies in circulation, this approach has become a long-standing valuation touchstone. This article discusses two primary valuation methods that are categorized under the market approach: the guideline public company method and the guideline merger and acquisition method. The guideline public company valuation method Under this method, appraisers identify companies whose stock (or partnership interests) …

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Business owner shaking hands on selling his business and having a valuation report to ensure success.

17 Reasons You Should Have A Business Valuation

There are many reasons to seek valuation. Seek valuation if you find yourself in a situation listed below. In my last post, I listed the three types of valuation reports and what they entail, namely: Comprehensive Valuation Report; Estimate Valuation Report; Calculation Report. Understanding when you need a business valuation is important when making major decisions and determining the type of valuation report you need. 17 Reasons Why You Should Consider a Business Valuation: Buying …

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