Business Valuation: Who does the Valuation Analyst Represent?

Most business valuation analysts belong to associations (such as the AICPA for CPA’s, the NACVA for CVA’s, USPAP for ASA’s) that require certain standards be followed in preparing a business valuation.  These business valuation standards tend to be quite rigid for a Conclusion or Opinion of value and more flexible for a Calculation of value.  Valuators doing work to these standards (which are required by any group the valuator belongs to and can be voluntarily agreed to by anyone who understands the standards) always represent only their findings (the Opinion found or the Calculation estimated).  This means they do not represent you or any other party even though you pay them and you may retain them.

Third party obligations when performing a business valuation require the valuation analyst to be impartial.  An example is the bank’s interest in having a fair and impartial business valuation if the analyst is preparing a valuation for a prospective loan and those obligations override allegiance to you.

If the valuator has a conflict of interest that must be stated in the report and it will cause the opinion to not be fully compliant.

Finally, if your purpose is for litigation or potential litigation such as divorce or partnership disputes all experts (including valuation experts) must be impartial or they can be disqualified by the court.  Court expert witnesses represent the court to allow the court to better understand a matter.  Having said this, in many matters experts hired by the opposing sides may find very different values.  Usually this is because facts are not agreed to, risks are assessed differently because underlying assumptions are seen differently by the parties, therefore the found value or result can be quite different.

  • Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver the highest price in the smoothest sale transaction possible. Harvest provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.

 


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver the highest price in the smoothest sale transaction possible. Harvest provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.