The Barson Group

Volume 11 - Issue 2                                                             

Spring, 2012                                                                                   



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We Have Gone Green.  All issues are e-only!!

In This Edition
Taking a Shortcut - The Good, The Bad & The Ugly
In the Middle of Somewhere
Focus on Fun
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 The BARSON GROUP is proud to announce the publication of


"Divorce: The Accountant as Financial Expert" 

 by Kalman A. Barson, CPA/ABV, CFE, CFF 




This is Kal's 6th text focusing on divorce related accounting services, including investigative accounting, business valuations, funds flow tracing and related issues.  While its primary audience is fellow CPAs, as well as attorneys practicing family law and judges sitting in the family section of the court, it is written in such a fashion so that it would be readily understood by the general lay public.  All royalties have been assigned to three charities devoted to helping women and children.


***We are delighted to announce that the book is in its second printing!***


Kal's book can be purchased directly through the AICPA -



Our Mini-Books: 


Reading & Understanding Tax Returns, Financial Issues in Divorce Practice; Business Valuation - The Basics; The Majesty & Glory of Unreported Income; Divorce, It Can Get Personal - Life Style Analysis & Related Matters - complimentary copies for the asking.  Contact us if you haven't received your copy.



Taking a Shortcut - The Good, The Bad & The Ugly


Regularly, when we forensic accountants/business valuation experts get contacted to discuss accepting a divorce assignment, one that includes the valuation of an interest in a business, it is not unusual for us to be queried along the lines of "What can be done to shortcut the process and save on fees?"  To a degree, and unfortunately sometimes, the real consequence of that question is the cheapening of the product.  That is not to say that every desire, every request, to find a way to contain fees, needs to be viewed as having the result of an inferior product, but rather sometimes that is the result, and sometimes it takes extra efforts on everyone's part to ensure that, if a shortcut concept is going to be applied, it be done in such a way that still enables the expert to produce a professional product.


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In the Middle of Somewhere


Often one of the most important steps in the valuation of a business, and at the same time a step not given the recognition and respect that it demands, is the issue of taking an average (or not) of the normalized net income of some, or all, of the years (or otherwise) detailed in the report.  It probably goes without saying that when valuing a business, clearly one of the most (probably reasonably safe to say the most) important numbers is the net income, which is going to be capitalized in determining value.  Typically, that net income is the result of a forensic analysis addressing and then normalizing one or more years of a business's operations.  Very commonly, we experts apply this normalization process to five years.  There is nothing particularly magical or mandatory about that - in theory it can be virtually any number of years, with the idea being that it is supposed to provide the reader with an understanding of the business' performance, and a reasonable foundation for expectations going forward.  Also, an IRS Revenue Ruling references the possible (not mandated) use of five years.  Thus, we experts often start with the five years ending with the valuation date (or possibly overlapping that date), and apply our forensic analysis and normalization adjustments to varying degrees to those five years.  The result of course is a normalized net income for a five year period.


Click To Read The Entire Article




 Focus on Fun


Accountants & Humor

A Sociological Fable


If it's worth doing, it's worth doing big. Charles Fuller of Crowley, Texas, wanted to start his own business. He got one of his girlfriend's mother's checks, which he made out in the amount of $360 billion, and attempted to cash the check at the Chase Bank on South Hulen Street in Ft. Worth, Texas. The bank wasn't fooled, and the police weren't amused. Fuller was arrested for attempted forgery, the unlawful carrying of a weapon, and possession of marijuana.



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