What the opposing party's books didn't show

The challenge

A business valuation is only as good as the books behind it. In a legal matter, those books are often prepared by the opposing party, the side with the most reason to make the business look smaller and less profitable than it is.

Our job was to value the business and, just as important, to test whether the books told the whole story.

What we found

• An asset recorded as cost of goods sold. A purchase that should have been on the balance sheet as a business asset had been expensed as cost of goods sold. That one entry made the business look less profitable and left the asset out of what the business owned, both of which pull a valuation down.
• An account that was never given to the court. While reconciling the books against outside records, we found an account that hadn't been included in the disclosures provided to the court.

What we did

• Reviewed the opposing party's books line by line instead of accepting the totals
• Tested how significant purchases were classified, and corrected the asset that had been expensed
• Reconciled the books against bank and outside records to find what was missing
• Documented both findings clearly for counsel, with support they could rely on
• Reflected the corrections in the business valuation

The result

Both findings were documented and provided to counsel, and the valuation reflected the business as it actually was, not as the opposing party's books presented it.

Why it matters in your case

In divorce, partnership disputes and other litigation, the numbers you're handed aren't always the whole story. A forensic review looks past the totals to how transactions were recorded and what's missing. We work with attorneys, mediators and individuals, and we document what we find so it holds up.