Valuation Insights Q1 2023

In this issue of Valuation Insights, our Kroll Institute Fellows analyze 10 trends we expect in 2023 as policymakers do their best to navigate an economic, geopolitical and regulatory polycrisis.

We are pleased to share the January 2023 edition of the Cost of Capital in the Current Environment infographic. The infographic continues to highlight some of the global financial market and economic indicators used to support Kroll’s cost of capital inputs: recommended equity risk and accompanying normalized risk-free rate.

Following 10 years of debate and development, in late 2022, the AICPA issued a working draft of its Accounting and Valuation Guide, Business Combinations (“the Guide”). Members of our Office of Professional Practice summarize the Guide to help you understand and comply with the requirements of FASB ASC 805, Business Combinations.

Climate, and more broadly, environmental, social and governance (ESG)-related issues are increasingly prominent considerations for investors and regulators. We provide a brief overview of three major ESG regulatory initiatives with significant potential impact on the data that U.S. companies need to collect and disclose in the near future.

Finally, we review the SEC’s recently issued pay versus performance disclosure requirements aimed at providing more insight into the relationship between executive compensation and a company’s performance.

In every issue of Valuation Insights, you will find industry market multiples that are useful for benchmark valuation purposes.

We hope that you find this and future issues of the newsletter informative.