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środa, 8 kwietnia 2015

The Three Stages of Business Valuation in a Divorce

A couple's divorce can sometimes encounter a deadlock if either one or both parties own at least part of a business.  Property distribution is often an issue during divorce proceedings, and if that distribution involves business ownership, then there must be a value assigned to the business.


The three stages of a business valuation in a divorce require determining 1) own and owe, 2) what the business makes and 3) the business valuation.  Laws that dictate the distribution of a business interest vary by state, so the guidance of a business valuation expert who specializes in divorce valuation can prove critical when deciding who gets what and how much.

Own and Owe
The assets that a business owns include tangible property like equipment and machinery as well as intangible property like trademarks and patents.  The liabilities that a business owes include money, goods and services.  Each state maintains laws about how past, present and future revenue-generating business activities and debt must be handled. A valuation expert can better enable couples to successfully navigate these kinds of complexities.
What the Business Makes
Assessing the profits a business has earned is the simplest way to determine what the business makes.  Profits are the difference between income and expenses.  Income is the cash derived from the sale of goods and services as well as the money received from other business activities like investments.  Expenses are the direct costs incurred to produce goods and to deliver services as well as indirect costs like overhead fees for utilities and rent.
Valuation
Different methods may be used to determine the value of a business, but three common approaches are the asset, income and market methods. The asset method analyzes the difference between assets and liabilities, which, while seemingly simple, can become challenging when determining which assets and liabilities to include in the valuation. The income approach examines the likely earnings that the time, money and energy invested in the business will yield.  This approach must consider the risk of not receiving either all or part of the earnings when anticipated.  The market method considers the worth of similar businesses and uses market data to determine what can be considered the "going rate" for that type of business.
A business valuation expert can help a couple either avoid or overcome a deadlock that could otherwise ruin the business that they have built.  This kind of outside counsel is frequently the best strategy, particularly since the court has little ability to manage a business deadlock during divorce proceedings.

The Need and Importance of Negotiation and Conflict Management Skills in Forestry Operations

"Conflict" is a relationship among two or more opposite parties, whether marked by violence or not, based on actual or perceived differences in needs, interests and goals. A healthy organization recognizes that conflicts are part and parcel of any human interaction, and would always be on the alert of the emergence of any potential conflict and take proactive measures to manage, contain and subsequently resolve it before it grows into unmanageable proportions. Lessons learnt from previous experiences of handlings conflicts, whether from within or outside of the organization under similar setting, would provide useful clues on how to deal with any new incidences. And when documented into step-by-step instructions, these experiences could be standardized, packaged and accepted as the organization's standard operating procedure (SOP) on conflict management and resolution.


Organization's policy everywhere has always been one which encourages collaboration and teamwork and minimize conflicts whenever they exist, either within the organization itself or with other stakeholders, productively. A "conflict" may nevertheless result through misunderstanding and misinformation, which can be resolved through consultation and empathy, with the common objectives of sustaining the organization's operation and ensuring its growth for the benefit of all stakeholders, in conformity with the principle of sustainable development (SD). The latter calls for operations to meet the following three vital criteria of SD namely, (1) economic and technical feasibility; (2) social acceptability; and (3) environmentally appropriate.
2.0 General Approach To Conflict Management
Whenever a "conflict" is perceived to have cropped up, the following line of action should be taken:
1. Stakeholders compile all the important information related to the conflict and verify the facts.
2. All parties agree to a time and a place for the meeting.
3. The meeting is organized and its minutes recorded.
4. Each party explains its interests clearly (what it wants and why).
5. All parties identify and discuss areas of agreement or similar interests.
6. Areas of disagreement or conflicting interests are identified and discussed by all parties.
7. Common goals for the negotiations are established.
8. Options are expanded: the parties compile a list of possible solutions for meeting the established objectives.
9. Criteria to assess options are developed by the parties.
10. The options are assessed against mutually agreed criteria.
11. An agreement is confirmed that maximizes mutual satisfaction among parties.
12. An action plan is developed with time frames and responsibilities for implementing the agreement.
13. A plan for monitoring and evaluating the agreement is confirmed.
14. The agreement is written up.
15. The agreement is made public.
16. The meeting agenda is agreed by the interested parties.
17. Information gaps are identified and decisions made on how missing information is to be obtained.
18. Decisions are made on how unresolved disagreements are to be handled.
19. All stakeholders agree to participate in negotiations.
20. Stakeholders analyze the conflict.
21. Primary stakeholders in the conflict are identified.
3.0 S.O.P. On Conflict Resolution In Relation To Forest Operations
Forestry operations such as logging, especially when conducted in environmentally sensitive areas and sites close to population centers always invite derision and criticism, or even outright condemnation from various stakeholders, particularly environmentalists. Conflicts with these groups as well as local communities (which may include natives and aborigines) may crop up, which often descend into prolonged chaos and, sometimes lead to unnecessary loss of life and damage to properties. As a general guide, the following steps could be followed by the forestry organization concerned in order to avoid potential conflicts:
(i) monitor the problems and needs of the local communities and forest-users and ensure that the direction and the core business of the organization's operations continue to satisfy those needs, albeit within the bounds of existing laws, regulations and local traditions and customs, as well as the organization's scale of operation and capability;
(ii) identify material and psychological impacts of organization's existence and operations on the community;
(iii) evaluate and promote social acceptance of organization's operations in the community with the view to avoid costly modifications or abandonment of the project at a later stage;
(iv) monitor changing environmental and conservation as well as social values in the community;
(v) obtain additional environmental and ethical/ religious information known to the local population;
(vi) hold stakeholders consultation meetings at regular intervals to provide forum for face-to-face encounter and promote dialogue and mutual understanding;
(vii) document all complaints, take appropriate actions promptly and follow up on the actions taken.
Figure 1 summarizes a conflict tree of a hypothetical forestry project in a developing country.
Photo 1 Photo 2
Stakeholder consultations (photos above) with local communities provide useful means of communication which would help promote understanding and empathy as well as resolve potential conflicts among the parties involved.
4.0 Summary and Conclusion
Skills in negotiation and resolving conflicts are two of the 21st century skills vital for organizations operating on high-stake projects such as forestry and land-use management. This is especially so given the increasing connectivity in the era of ICT which brings along with it increasing democratization in our daily business and decision-making process, which is the main feature of the principle of sustainable development. Development projects should be conceived, planned and executed in such a manner that they would result in minimum of disturbance and upheavals, both over the short and long terms, to the satisfaction of the major sections of the affected stakeholders – a situation which is possible only in the presence of relevant and reliable supporting data and information, which would in turn enable "options" be made available and placed on the table.