Professional Business Valuation There are many reasons for having a business valuation performed. Your accountant or estate attorney may request that you have a valuation performed for estate or gift planning purposes. If you are gifting portions of your family business to members of yourfamily or are serving as the executor of an estate, taxing authorities will require a formal valuation report. Valuations are also required to substantiate the value of business assets, which make up part of a charitable contribution. A business valuation may be required for determining equitable settlements in divorce matters. Often, the judge will require such information before making a determination on the settlement issues. One of the best reasons to obtain a business valuation is for use as an ongoing management tool in your business. Whether you are evaluating purchase of a new business, determining the adequacy of life insurance or meeting the requirements of a buy/sell agreement, a well prepared business valuation is a measurement tool that helps business owners assess the success of the business.

What is involved in preparing a Business Valuation? To perform a thorough analysis, make a qualified value determination, and prepare a proper report communicating the results of the business valuation easily requires 40 to 60 hours of work. Peculiar circumstances such as difficulties obtaining needed information, a unique or specialized industry, or a litigious situation requiring special care and preparation will often require more time to prepare the valuation. An estimate of fees and time required will be provided to you prior to beginning the valuation. This is why we provide you with an “engagement letter” which we request that you sign and return to us, indicating your understanding of the engagement. But…Why can’t I just use the book value of the business? Book value is almost never a true indicator of the value of the business. Book value generally reflects the assets of the company net of depreciation and liabilities, ignoring appreciated asset values and intangible values such as goodwill or trade rights.

What is a CVA? The National Association of Certified Valuation Analysts (NACVA) certifies practitioners to perform business valuations. The Certified Valuation Analyst (CVA) designation is achieved through training and rigorous testing of practitioners to demonstrate they are qualified to provide capable and professionally executed valuation services. To qualify as a CVA, a professional must first be a Certified Public Accountant in good standing and complete the required training to be certain that practitioners have the knowledge and understanding necessary to perform competent services. Each CVA must complete a proctored exam and case study. NACVA members must continue to participate in training and quality enhancement each year to ensure that their services continue to adhere to industry standards of practice. NACVA is currently the only business valuation credentialing organization mandating such a rigorous recertification program. This initiative was enacted by NACVA’s members to promote continuing personal development and to give added assurance to users of valuation services.  When value is the issue, you need a Valuation Professional. Biegler and Associates is proud to have two Certified Valuation Analysts on our staff. Contact us to find out more about Professional Valuation Services at Biegler & Associates.