Calculating damages related to an impaired business can be a difficult task. No one has a crystal ball regarding the future. However, the valuation approach allows for a supportable and hopefully reasonable prediction of what would have happened had an impairment not occurred.
The value of an ongoing business to an owner in its most straightforward economic sense is the present value of the future projected earnings (revenue less expenses) of that business that will flow to the owner, adjusted for the risk factors that may foreseeably impact those future projected earnings. The field of business valuation has any number of ways in which a business can be valued, and appropriately requires certain parameters be defined in the valuation process.
