Top 10 Things Attorneys Should Know About Business Valuation

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construction; government contractor and technology; not-for-profit; real estate; emerging growth companies business advisory; forensic accounting

By: Jeffrey Walsh

Abstract:

If you're an attorney, what do you need to know about business valuations? How do you best serve your clients and ensure they get the best appraisal for their needs? By applying the following 10 steps to business valuations.

Define the project. Provide the appraiser with the specific ownership interest and level of value for the interest being appraised. A business interest can be affected by voting rights, preferences in distributions or liquidation, and participation in management. The size of the ownership interest can also impact value, especially when comparing controlling interests to minority interests.

For an accurate business valuation, make sure to hire an experienced and credentialed appraiser for the task.

Understand the standard of value. There are several different types of value and they can vary significantly. Know which standard of value applies for your engagement, given the circumstances under which it’s being used. “Fair Market Value” is used for estate and gift tax purposes. “Fair Value” is often appropriate in litigation matters. There are other standards of value such as “Investment Value” and “Intrinsic Value” that may also be appropriate to use. Want to know the rest of the steps? Click below to download the PDF article.

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