Thank you for sharing!

Your article was successfully shared with the contacts you provided.


A business has a value equal to the expected future economic benefits to its owner, discounted to a present value. This concept has broad acceptance and appears in multiple economic, finance and valuation texts. See e.g. Damodaran, Aswath, Damodaran on Valuation. 2nd ed., (Hoboken, New Jersey: John Wiley & Sons, 2006) at p. 25. Although perhaps similar in concept and application, lost profits represent the incremental change in revenue attributable to a particular action, plus or minus the change in costs arising from that change in revenue (e.g. revenue declined by $10 due to the defendant’s wrongful action but costs declined by $3 due to the same action so the lost profits are $7).  See AICPA Practice Aid 06-4, Calculating Lost Profits at ¶ 4. Lost profits must be related to the wrongful action of the defendant which becomes less certain over longer periods as other factors intercede. The diagram below shows the difference in the calculations:

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at customercare@alm.com

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2018 ALM Media Properties, LLC. All Rights Reserved.