When Values Matter, Credentials Matter, Too

May 3, 2022

Business valuations can have a significant impact in the outcome of important matters in one’s professional and personal life. Important matters requiring an opinion of value may include the division of assets for a divorce settlement, shareholder dispute, gifting shares, or settling an estate. From taxes to settling a shareholder dispute, a business valuation can factor significantly in the outcome of the matter at hand.

When it comes to such matters, it makes sense to make an informed decision when choosing the right professional to prepare the business valuation. If you or a friend needed a medical opinion, you would likely seek out a professional who had the experience and credentials that are applicable to the specific medical condition. It would not make sense to seek the advice of a dentist for a foot condition, even though the dentist has a medical degree.

When seeking tax advice, most would turn to their CPA. But does turning to a CPA to develop a business valuation make sense? The accounting and business valuation professions are two different disciplines. In fact, the American Institute of Certified Public Accountants (AICPA) recognizes this and offers additional training and accreditation in business valuation for those accountants who want to prepare business valuations.

Business valuation professionals are governed and certified by separate organizations as the discipline of business valuation has its own set of rigor and standards. As the IRS indicates, a “qualified appraiser” is an individual who has earned an appraisal designation from a recognized professional appraiser organization; for business valuation the designations that meet the requirements of a qualified appraiser include CBI, CBA, ASA, CVA, or ABV. A qualified appraiser does not include the designation of CPA. Lou Pereira has earned four of these designations including being a Certified Business Appraiser (CBA), from the Institute of Business Appraisers (IBA) of which there are fewer than 12 in New England and fewer than 200 across the United States.

Choosing a professional to prepare and present a business valuation is an important decision. It is advised that you do your research as the result can be significant in terms of the awarded dollar value whether from arbitration, settlement, or a court ruling. Read how values matter in a divorce case when separate valuations were prepared by a credentialed business appraiser and a CPA. Read how the settlement of an estate was affected when a CPA was hired by one party to prepare the valuation and how that fared against the valuation prepared by a Certified Business Appraiser.

When Values Matter, Credentials Matter, too. Do your homework and get the right credentialed professional preparing the business valuation.

Contact us.