Business Valuations: Common Methods and Scenarios, Choosing an Expert

Business valuations serve a multitude of purposes. Valuing a business, its assets, and intangibles could be required for the sale of a business, gift or estate tax valuation purposes, 409A valuations for stock options, or other reasons. The first step in valuing a business is employing the best professional. There is an abundance of business valuation expert designations. Among these are a Certified Business Appraiser (CBA), Accredited in Business Valuation (ABV), Accredited Senior Appraiser (ASA), and Certified Valuation Analyst (CVA). Choosing the best fit for a business' current needs can be daunting.

The process itself entails choosing the proper valuation method. Market capitalization, times revenue method, earnings multiplier, liquidation value, and discounted cash flow are a few standard methods. The method chosen significantly impacts the overall valuation of the company.

The purpose of the business valuation, and whether a higher or lower valuation is preferred, affects the business valuation process. Buy-sell agreements, divorce, and shareholder disputes often require the valuation of a business, as does a corporation's need to memorialize its stock value to ensure the business does not exceed the Section 1202 thresholds to qualify for capital gains exclusion.

Listen as our panel of business valuation experts explains the business valuation process for owners and advisers to small businesses.

1. Business valuations: introduction
2. Choosing an expert
3. Uses
4. Standard valuation methods
5. Examples

The panel will cover these and other key issues:

• Examples of how the method chosen impacts the valuation of the company
• How business valuations are utilized for 409A valuations
• Whether a certain business valuation credential is preferable in specific situations
• Does a particular valuation method generally generate a higher valuation?

Learning Objectives

After completing this course, you will be able to:

• Identify common business valuations credentials
• Decide how business valuations are utilized for 409A valuations
• Determine common methods used to value assets
• Ascertain how the valuation method chosen impacts the resulting valuation in specific scenarios

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and their respective partners and shareholders.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).