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Unformatted text preview: Chapter 10 Forensic and Investigative Accounting 5 Damages Calculation Approaches
The out-of-pocket loss refers to the difference between the actual value received and the actual value conveyed. The plaintiff can recover nothing beyond his or her investment. Under the benefit-of-the-bargain theory (or expectations remedy), the damages include not only the money invested but also other expenses such as increased costs, lost profits, and decreased value of the investment. Chapter 10 Forensic and Investigative Accounting 6 Damages Calculation Example
Debra (defendant) sells Paula (plaintiff) an asset with an alleged value of $2 million for $1.8 million. However, the asset really had a market value of only $1.6 million...
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