AICPA has issued three new practice aids

Over the last several months, the American Institute of CPAs (AICPA) has issued three new practice aids that provide relevant technical guidance to financial experts who provide damage analyses services. David Duffus, a partner in Baker Tilly’s Global Forensics and Litigation Services Practice, chairs the AICPA’s Economic Damages Task Force, which was responsible for the development of the practice aids. 

David was recently interviewed to discuss the content of the practice aids, as well as how the guidance is relevant to both financial experts and the attorneys who retain those experts.

Q: David, what are the three new practice aids that have been published?

Duffus: The three new practice aids are Calculating Lost Profits, Attaining Reasonable Certainty in Economic Damages Calculations: Revenues, Costs and Best Evidence, and Calculating Intellectual Property Infringement Damages.

Q: Why three new practice aids in such a short period of time?

Duffus: Part of the value that the AICPA brings to the membership of the Forensic & Valuation Services Section is the development of technical materials that enhance the expertise of CPAs who perform damage analysis services and provide expert witness testimony. 

In the past, the AICPA has published practice aids on all three of the topics that are the subject of the new practice aids, and those practice aids have been valuable resources.  However, there was a realization that the practitioner community would benefit from updated and expanded guidance on the issues that are central to many matters involving the calculation of damages.  We were lucky enough to have a strong group of volunteers who were all willing at the same time to undertake the effort required to develop the new and updated material.

Q: Tell us a little bit about the first practice aid that you mention, Calculating Lost Profits.

Duffus: In 2006, the AICPA published its initial practice aid on the topic of lost profits damages, which provided a strong foundational perspective on the elements of lost profits analyses.  However, with the passage of time, it became apparent that an update was needed to: