Is the valuation based on a going concern income-based approach such as a discounted cash flow approach (DCF) or capitalized cash flow approach (CCF)? If so, what discount rates or capitalization rates are the value conclusions based upon? Step 6 to reviewing a involves assessing the reasonableness of the selected discount rates or capitalization rates (or "cap rates"). Although discount rates and cap rates are related terms, they are not interchangeable. For clarification, each of th...
Is the ? If so, what future cash flow assumptions are the value conclusions based upon? The reasonableness of the underlying cash flow assumptions can significantly affect the integrity of the resulting value conclusions. Under common income-based valuation approaches, the business valuator must select an operating cash flow level (or range) that he/she expects the business to generate going forward. The cash flows may vary from year to year over a specific projection period or an on...
How many different are there? How does a valuator select which valuation approach to apply? What if the valuator adopted an incorrect valuation approach? The business valuator is responsible for selecting an appropriate valuation approach and for ensuring that it has been correctly applied. Step 4 to reviewing a business valuation report involves identifying and assessing the valuation approach adopted by the valuator. In valuing a business, there are many valuation approaches to sel...
How reliable is a valuation that was rendered based on a restricted or limited scope of review? Is the quality of a affected by the extent to which the valuator was restricted from examining certain key documents and/or interviewing key parties? The third step to reviewing a business valuation report involves identifying any major scope limitations, restrictions and qualifications rendered on the value conclusions. This helps ascertain whether or not the valuator conducted sufficient work to...
VSP professionals co-author Chapter 27 - The Importance and Role of Business Valuations and Exit Planning in "Advisors Seeking Knowledge - A Comprehensive Guide to Succession and Estate Planning", published by Lexis Nexis 2012. to Download Release info.
What qualifies someone to be an ? Will the quality of a valuation report be affected by the qualifications of the valuator? The second step to reviewing a business valuation report involves reviewing the business valuator’s credentials and qualifications.
The pre-eminent designation for business valuation in Canada is the Chartered Business Va...
Is a appropriate for the intended purpose of the valuation? What is a Calculation Valuation Report? Has the valuator conducted a sufficient level of work to provide the assurance required by the intended users of the valuation?
Chartered Business Valuators (CBVs) in Canada must adhere to the professional practice standards of the Canadian Insti...
(CBVs) support the business and legal communities in matters which include, but are not necessarily limited to, business valuation, value enhancement, exit planning and litigation support.
CBVs are frequently retained as independent experts to provide a business valuation report in situations where th...
Implementing an effective will increase the attractiveness of your business to a potential purchaser and provide a significant return on your investment. Implementation, however, is the key. Many business owners appreciate the importance of a good action plan, but successful business owners excel at implementing the action plan.
"According to CIBC, an es...
This past week I presented to a group of business owners on the importance of having a professional business valuation. In addition to many situations where an is required (e.g. estate freeze, shareholder or matrimonial dispute litigation, purchase or sale of business, etc.), a business valuation can also be a very powerful planning tool.
Speaking as a professional b...