Page 53 - Economic Damage Calculations

expected future income or cash flow stream. The income or cash flows that are expected to result
in the future as of a given point in time, given a particular scenario.

expected value. The weighted average of a combination of possible outcomes.

ex post. Actual returns or other historical data. fn 12

forensic services. Consist of either litigation or investigation engagements as defined in the State-
ment on Standards for Forensic Services (SSFS) No. 1 (FS sec. 100). fn 13

foreseeability. The ability to see or know in advance including the reasonable anticipation that the
harm or injury is a likely result from certain acts or omissions. In tort law, the "foreseeability" el-
ement of proximate cause is established by proof that actor, as person of ordinary intelligence
and prudence, should reasonably have anticipated danger to others created by his or her negligent
act. That which is objectively reasonable to expect, not merely what might conceivably occur. fn
14

future value. The value, as of a future date, of economic benefits or proceeds from sale.

income. As used in a damages calculation, "income" may be used by experts to refer to the profits or
cash flows of an entity.

industry risks. Risks associated with an entity's conducting business in or being exposed to the risks
of a specific industry.

industry risk premium. A risk adjustment directly associated with a specific industry or business
group.

investment-specific risk premium. See company-specific risk premium.

inflation. The rate at which prices increase in an economy or in an industry.

interest rate. A rate which is charged or paid for the use of money.

interest rate risk. The risk to an entity and its financial performance that results from its exposure to
variability in market interest rates.

fn 11 Defined within the text of the AICPA FVS Section Special Report 09-1.

fn 12 The Free Dictionary, s.v. "ex post," http://financial-dictionary.thefreedictionary.com/ex+post.

fn 13 Statement on Standards for Forensic Services (SSFS) No. 1, paragraph 1.

All FS sections can be found in AICPA Professional Standards.

fn 14 Black's Law Dictionary, 9th ed.

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