Business valuation standards compliance
Are you a seasoned business person or experienced professional? Then you know that getting your business appraisal done right is one of the most demanding challenges you are likely to face.
Idle curiousity aside, a casual “spot check” somewhere on the Web will not do. As the economic climate gets tougher, your business valuation must pass greater scrutiny to be taken seriously by other business people, tax authorities, legal experts, investors or courts.
So how do you make sure your business appraisal stands up to the challenge? The short answer – standards compliance.
How business valuation standards help
Since your business appraisal is likely to be shared with other business people, it needs to be clear, convincing and trustworthy. A standards compliant business appraisal tends to be more believable because:
- It uses the recognized business valuation methodologies.
- It follows a well-known business appraisal process.
- Your business valuation results are reported in a professional, defensible way.
As others read your business valuation report, they will see that you have used the well-known business valuation approaches and methods, followed the steps necessary to make sure your business appraisal is thorough and accurate, and reported your results in a clear and defensible manner.
Leading business valuation standards
Here are the key business appraisal standards you need to consider:
- Uniform Standards of Professional Appraisal Practice (USPAP). They are revised annually by the Appraisal Foundation.
- AICPA Statement on Standards for Valuation Services (SSVS). This Standard came into effect in early 2008 and is followed by the CPAs who do business valuation work.
- International Valuation Standards (IVS). Cover both business and commercial real property appraisals.
- US Internal Revenue Service Ruling 59 – 60. If you need to present your business appraisal to the IRS, e.g. for gift or estate tax purposes, make sure it complies with the Ruling 59 – 60.
How ValuAdder helps you with standards compliance
All ValuAdder tools are designed with the business valuation standards compliance in mind:
ValuAdder V5 software gives you a set of standard business valuation methods under all three professionally recognized approaches: Market, Income, and Asset.
Business Valuation Report Builder gives you a professional report format along with instructions and references on how to prepare a standards-compliant business appraisal report.
ValuAdder Handbook is full of essential information on how to prepare a professional business appraisal – and ensure that it complies with the standards.