• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Harvard Law School Bankruptcy Roundtable

Harvard Law School Bankruptcy Roundtable

  • Blog
  • About Us
  • Coverage-in-Depth
    • Crypto-Bankruptcy
    • Purdue Pharma Bankruptcy
    • Texas Two-Step and the Future of Mass Tort Bankruptcy
  • Subscribe
  • Show Search
Hide Search

New AIRA Standards on Distressed Business Valuation

By Michael D. Pakter, Gould & Pakter Associates, LLC

Michael_D._PakterGiven the increasing number of professionals who are performing business valuation engagements, the Association of Insolvency & Restructuring Advisors approved Standards for Distressed Business Valuation (“AIRA Standards”), effective March 1, 2014, to improve the consistency and quality of practice among its members.

In Part 1 of a 2 part article, the author submits that the selection of applicable valuation standards is impacted by the valuation analyst’s professional certifications, his or her association memberships and credentialing, the asset, business, or interest being valued and the applicable forum. The author provides an overview of the AIRA Standards on distressed business valuations and shares views on what standards business valuation professionals should consider in a distressed business valuation engagement.

In Part 2 of the 2 part article, the author discusses some of the unique issues regarding valuations of distressed businesses relating to engagement development, procedural steps in the business valuation engagement, and generally accepted valuation approaches. The AIRA Standards note that traditional valuation methods may require significant adjustments to reflect the unique financial or operating issues associated with a firm in distress, the legal context of the valuation and the intended purpose of the valuation.

The author concludes that despite the widespread use by business valuation analysts of a specific company risk premium in a “build­up” or “capital asset pricing model” there remains limited academic research on quantification of specific company risk premiums, which generally remains in the realm of the financial analyst’s judgment.

To read the full article see Part 1 and Part 2.

Written by:
Editor
Published on:
September 8, 2015

Categories: ValuationTags: Gould & Pakter Associates, Michael Pakter

Primary Sidebar

Categories

Recent Posts

  • Independent Directors Properly Exculpated as Debtors’ Disinterested Fiduciaries Under Chapter 11 Plan, Southern District of Texas Bankruptcy Court Rules June 10, 2025
  • The World of Interlocutory Bankruptcy Appeals June 3, 2025
  • Purdue: Impacts on Cross-Border Restructurings May 27, 2025

View by Subject Matter

363 sales Anthony Casey Bankruptcy Bankruptcy administration Bankruptcy Courts Bankruptcy Reform Chapter 11 Chapter 15 Claims Trading Cleary Gottlieb Comparative Law Corporate Governance COVID-19 cramdown David Skeel Derivatives DIP Financing Empirical FIBA Financial Crisis fraudulent transfer Jared A. Ellias Jevic Johnson & Johnson Jones Day Mark G. Douglas Mark Roe plan confirmation Priority Purdue Pharma Purdue Pharma bankruptcy restructuring Safe Harbors Schulte Roth & Zabel Sovereign Debt SPOE Stephen Lubben Structured Dismissals Supreme Court syndicated Texas Two-Step Trust Indenture Act Valuation Weil Gotshal Workouts

Footer

Harvard Law School Bankruptcy Roundtable

1563 Massachusetts Ave,
Cambridge, MA 02138
Accessibility | Digital Accessibility | Harvard Law School

Copyright © 2023 The President and Fellows of Harvard College

Copyright © 2025 · Navigation Pro on Genesis Framework · WordPress · Log in