How much is a given business worth? How much is a particular shareholder’s interest in that business worth? How much are a company’s intangible assets worth? These questions arise in a variety of situations. It is important to recognize the need that fits your purpose and conduct the valuation accordingly. Defensible opinions of value are necessary for many reasons and each reason may require a different approach and utilize different assumptions. SPM&Co. provides business appraisals to assist clients in a wide variety of situations.
There are two acceptable scopes of valuation assignments as described by the NACVA Professional Standards:
Valuation Engagement: A Valuation Engagement requires that an appraiser apply valuation approaches or methods deemed in the appraiser’s professional judgment to be appropriate under the circumstances and results in a Conclusion of Value
- All relevant information is considered.
- Appraiser collects and analyzes all information expected to be relevant to the valuation.
- All conceptual approaches deemed to be relevant by the appraiser are considered.
This is mandatory for all valuations conducted for purposes of tax, ESOP, litigation and financing – and is more than suitable for all other reasons.
Calculation Engagement: A Calculation Engagement occurs when the client and member agree to specific valuation approaches, methods and the extent of selected procedures and results in a Calculated Value
- Limited relevant information is considered.
- Appraiser performs limited information collection and analysis procedures.
- The calculations may be based upon conceptual approaches as agreed upon with the client.
This can be used for a buy-sell agreement, for decision to buy or sell a company (strategic, pricing analysis) as well as for initial-stage strategic planning.
NOTE: Given these scopes, we can be hired as valuation consultants as opposed to being independent appraisers. However, only in a full valuation engagement are we providing an opinion of value.
Please click on the arrows for more specific details on the following:
Transaction & Valuation Consulting
What’s Your Business Worth?
Your business is probably your largest asset, and as such, you may benefit from knowing what it’s worth. A way to know the true value of your business is by getting a business valuation.
A business valuation can help you:
- Ensure that your business and family are properly protected
- Plan for your retirement and determine the value of your estate
- Draft a buy/sell agreement, if necessary
- Create a succession plan for the future of your business
- Prepare for taxable events