If you own a business, want to protect your wealth, or
determine how much an asset is worth, you may some day need professional
valuation services. A business valuation
service might:
- Assist in the development of an estate or tax plan to
protect your wealth
- Assist with the creation of a succession plan for
your business
- Assist with determining a sales price for your
business
- Assist in the planning for a merger, acquisition or
stock offering
- Assist in the determination of the value of assets
and liabilities for a divorce settlement
- Assist your attorney in litigation
- Assist in the determination of built-in gains at time
of S Election by a C Corporation
The American Institute of Certified Public Accountants
(AICPA) allows us to provide two different types of valuation services:
Valuation Engagement - in a valuation engagement, the valuation
analyst is free to apply the valuation approaches and methods he or she deems
appropriate in the circumstances. The valuation
analyst expresses the results of the valuation as a conclusion of value.
Calculation Engagement - in a calculation engagement, the valuation
analyst and the client agree on the valuation approaches and methods the
valuation analyst will use and the extent of procedures the valuation analyst
will perform in the process of calculating the value of a subject interest, and
the valuation analyst calculates the value in compliance with that
agreement. The valuation analyst
expresses the results of these procedures as a calculated value.
The valuation
engagement results in the valuation analyst expressing his or her opinion
as to the value. It typically is
expressed in a full written report. This
type of engagement is usually a minimum of forty hours of professional time,
often longer. This type of report is
most likely necessary when a professional opinion of value is required, such as
in a court hearing or tax matter.
The calculation
engagement is tailored to specific situations and it usually requires fewer
professional hours than a valuation engagement, because an opinion of value
will not be expressed. This engagement
is generally suited for internal use or other engagements that do not require
an opinion of value.
The AICPA has developed the Accredited in Business Valuation
(ABV) Credential for CPAs. Those who
earn the ABV Credential must:
- Be a member in good standing of the AICPA
- Hold a valid CPA certificate or license
- Demonstrate experience in business valuation
- Pass a rigorous business examination exam
- Demonstrate a history of continuing education in
business valuation subjects
If you have a need for business
valuation services, contact Don B. Cotner, CPA/ABV at 740-596-5126 or dcotner@3cscpa.com.
