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By Eddie Blaugrund, CPA, CVA, CFE;
and
Elaine Rockwell, CPA, CVA
If a business is part of your
marital assets, a valuation may be required. In
litigation, divorcing couples often hire two
appraisers to value the same business. Depending on
the case, after money is spent on two valuations,
more money may be required to be spent on
depositions of the appraisers, expert reviews of the
other expert report, pre-trials, preparation for
trial and expert testimony.
If an alternative process to
litigation is utilized, other marital assets (cash)
may be saved. It is not uncommon to hire one
valuation expert to perform a valuation of the
business. The challenge is to find a qualified
appraiser.
Why is finding a “qualified” appraiser
so important?
Many certified public accountants
believe that they have the skill set to perform a
business valuation. In fact, many of them do possess
the necessary skills; what they are lacking is the
proper training and experience. A qualified
appraisal should be well supported and adhere to
certain established standards, guidelines and
procedures.
There is currently no definition
for a “qualified appraiser”. However, there are
certain criteria one should look for when hiring a
valuation analyst. First and foremost, a valuation
professional should be accredited. The four
organizations that have business valuation
designations are as follows:
-
American Institute of Certified
Public Accountants’ (AICPA)
Accreditation in Business Valuation (ABV)
-
The National Association of
Certified Valuation Analysts (NACVA)
Certified Valuation Analyst (CVA) or Accredited
Valuation Analyst (AVA)
-
American Society of Appraisers
(ASA)
Accredited Member (AM), Accredited Senior
Appraiser (ASA) and Fellow Accredited Senior
Appraiser (FASA)
-
Institute of Business
Appraisers (IBA)
Accredited by IBA (AIBA, Certified Business
Appraiser (CBA), Master Certified Business
Appraiser (MCBA) and Business Valuator
Accredited for Litigation (BVAL)
Most certifications require either
one or a combination of the following: an exam,
submission of valuation report(s), accreditation of
another organization and an experience requirement.
If the potential appraiser has one or more of these
accreditations, you can have a certain level of
comfort that the appraiser has received adequate
training to perform the engagement. However,
designations alone should not be the sole factor in
determining if an appraiser is “qualified”.
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