The ESOP Valuation Process

by Wendy S. Ingalls, CPA/ABV, CBA, ASA and Nicholas J. Heinz, ASA

The establishment of an ESOP is a complex process. Valuation is one piece of the puzzle. This article details the steps necessary to prepare an appraisal to perhaps make the process less intimidating.

Excerpts from the new book,
A Reviewer’s Handbook to Business Valuation: Practical Guidance to the Use and Abuse of a Business Appraisal

Chapter 9: Valuation Discounts and Premiums

by Timothy R. Lee, ASA

This excerpt from Chapter 9 introduces the concept of valuation premiums and discounts, discusses the discount for lack of marketability (DLOM), and provides the reader sufficient context to understand that there are advantages and disadvantages pertaining to all DLOM methodologies.


Chapter 17: Alleged Errors of Omission by Appraisers

by Guest Contributor: L. Paul Hood, Jr., JD, LLM

This excerpt from Chapter 17 provides a few (of many) examples of potential errors of omission by appraisers, along with numerous case citations. As Paul points out, however, there are two sides to every story and sometimes the courts do not get it right.


Other Articles of Interest

About Mercer Capital

Mercer Capital is a full-service business valuation and financial advisory services firm. Valuation services are provided for estate and gift tax compliance matters, limited and general partnerships, employee stock ownership plans, profit sharing plans, buy-sell agreements, mergers and acquisitions, financial reporting valuation, and litigation support. 

For more information, visit our website at


Vol. 3, 2011

New Book Now Available

A Reviewer's Handbook to Business Valuation

Practical Guidance to the Use and Abuse of Business Appraisals

by L. Paul Hood, Jr., JD, LLM and Timothy R. Lee, ASA

For more information, visit

Upcoming Speeches

June 28, 2011
Demystifying Statutory Fair Value
Webcast Sponsored by Valuation Products and Services & the Financial Consulting Group
Z. Christopher Mercer, ASA, CFA, ABAR

July 14, 2011

Standards and
Premises of Value

AICPA Webcast

Z. Christopher Mercer, ASA, CFA, ABAR

& Travis W. Harms, CFA, CPA/ABV

August 2, 2011
Valuing Closely Held Companies 
Business Ownership & Succession Planning Forum
Z. Christopher Mercer, ASA, CFA, ABAR

August 11, 2011

Business Appraisal Reports: Perfecting the Art 
Webcast sponsored by
BV Resources
Timothy R. Lee, ASA &
L. Paul Hood, Jr., JD, LLM

Complete Listing

In the Next Issue

Court Case Update: New York Statutory Fair Value - Matter of Giaimo

Being Proactive in Your Buy-Sell Agreement Planning Can Fund the Cost of Appraisals
Copyright © 2011 Mercer Capital, All rights reserved.

Value Matters (TM) is published six times a year and does not constitute legal or financial consulting advice. It is offered as an information service to our clients and friends. Those interested in specific guidance for legal, tax, or accounting matters should seek competent professional advice. Inquiries to discuss specific valuation matters are welcomed.