Articles

The following was written by Malibu Foudning Partner Peter Kubasek after returning from the 2010 Olympics in his hometown of Vancouver, British Columbia, Canada.

Having spent nine days at the Olympics in my hometown of Vancouver, British Columbia, I am still reveling in the spirit of hope, optimism and comradery I experienced there.

Meet the Manager: In the Right Space at the Right Time

It is predicted that over the next decade, approximately 20 million privately owned businesses in North America will be for sale. Why? Some call it the graying of America. But whatever you call it, statistics indicate that almost 800,000 business owners plan to retire by 2009.

Business owners often wonder, "What is my business worth?"

For public businesses, the stock exchanges (NYSE, AMEX, NASDAQ, etc.) answer this question. The business is worth the price per share of the most recent trade times the number of shares outstanding.

Do I need to hire a financial advisory firm to determine the value of my private business interests that I am gifting, or that are part of an estate?

If so, your company must perform an annual goodwill impairment test in order to comply with FAS 142. Prior to the adoption of FAS 142, businesses amortized goodwill for a period not to exceed 40 years. With the adoption of FAS 142, goodwill is no longer amortized, but it is written down if it becomes impaired. The company must perform an annual goodwill impairment test to determine if goodwill impairment has occurred.

Executives who receive non-incentive stock options to purchase common stock (“Options”) should consider obtaining a qualified appraisal of their company’s stock to avoid income tax liability under new IRS Section 409A. Failure to comply with 409A could result in executives having to pay income tax and a 20% penalty upon the granting of the Options. A qualified appraisal of a company’s stock is an important step in ensuring that the Options are exempt from regulation under 409A.