A BV/FLS Profile

Practitioners can obtain guidance from many sources. The AICPA is currently developing valuation standards for its members; the other organizations already publish standards. In addition the Appraisal Foundation publishes the widely recognized Uniform Standards of Professional Appraisal Practice that cover real estate, personal property, business and intangible assets. The Private Equity Industry Guidelines Group has developed its own valuation guidelines for funds investing in private equity. With so many sets of guidelines to choose from, some are calling for a single recognized valuation standard.

Practitioners also have access to guidance on valuation (“fair value measurement” in GAAP literature) and related audit activities from the Financial Accounting Standards Board, Securities and Exchange Commission and Auditing Standards Board. Guidance also is under discussion at the Public Company Accounting Oversight Board, the International Accounting Standards Board and the International Valuation Standards Committee.

In response to the demand for business valuation services and an absence of relevant education at universities, several organizations have developed programs that teach business valuation. The AICPA’s six-day “Business Valuation Essentials” course covers the core knowledge used in business valuation: economics, finance, industry analysis, financial statement analysis, sales transaction research and valuation methodologies. For more information, go to the AICPA’s Business Valuation and Forensic & Litigation Services Center, www.aicpa.org/bvfls .

— Michael A. Crain, CPA/ABV, managing director,
The Financial Valuation Group, Fort Lauderdale, Fla.,
and chair of the AICPA Business Valuation Committee