FVC1948. Intersection of Income Market Approach

Area of Expertise: 
The Experienced Pro
Field of Study: 
CPE Credit: 
Knowledge Level: 
Advanced Preparation: 
Basic knowledge of, or general experience in, forensic accounting, business valuation, or litigation

Wednesday, November 6, 2019

While it is convenient to distinguish between the income and market approaches to value, one should be careful not to overstate the differences. After all, the approaches share a common objective of describing how a transaction for the subject asset would occur on an arm's-length basis at the valuation date.
Learning Objectives:

  1. Use cash flow forecasts underlying the income approach to inform market multiples
  2. Apply market-derived returns to influence discount rates used in the income approach
  3. Interpret observable market multiples
  4. Interpret historical market returns and how best to correlate indications of value from the two approaches