Other Misc. Liabilities
See Inputs and Balance Sheet for general instructions.
Other Misc. Liabilities are operating liabilities that remain constant for all future years regardless of the sales level. BVX cannot think of any real life example that would fall into this category. However, this cell is provided because it is possible there might be some such liability.
Other Misc. Liabilities do not impact cash flow because BVX does not change this value in the future.
Do not include debt, line of credit, officer loans, etc. in Other Misc. Liabilities. Enterprise Value determination should exclude these liabilities even if they are transferred or are assumed by the buyer. Transfer or assumption of such liabilities by the buyer will reduce the “net” to the seller by the amount of such
assumption, but should not change the “Enterprise Value” of the business.
Many businesses record miscellaneous liabilities on their balance sheet. Usually these are liabilities for which the seller received the benefit in the past, but the payments have not been made. Many of these liabilities should have been recorded as accrued expenses, deferred taxes, deferred wages, etc. Often miscellaneous liabilities on the balance sheet are unclassified or mis-classified liabilities. These liabilities should not be entered in BVX as Other Misc. Liabilities without proper review. They should not be included in BVX valuation as a buyer responsibility unless they can be sustained at their existing level indefinitely i.e. they do not have to be retired in the future. In case of doubt, professional advice should be obtained to determine if they should remain with the seller or are transferred to the buyer.
In most cases buyer will not assume tax-related liabilities regardless of how they are classified.