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Business Valuation and Matrimonial Breakup Guide
by Eddie Blaugrund, CPA, CVA, CFE; and Elaine Rockwell, CPA, CVA
 
 
If a business is part of your marital assets, a valuation may be required. In litigation, divorcing couples often hire two appraisers to value the same business. Depending on the case, after money is spent on two valuations, more money may be required to be spent on depositions of the appraisers, expert reviews of the other expert report, pre-trials, preparation for trial and expert testimony.

If an alternative process to litigation is utilized, other marital assets (cash) may be saved. It is not uncommon to hire one valuation expert to perform a valuation of the business. The challenge is to find a qualified appraiser.

Why is finding a "qualified" appraiser so important?

Many certified public accountants believe that they have the skill set to perform a business valuation. In fact, many of them do possess the necessary skills; what they are lacking is the proper training and experience. A qualified appraisal should be well supported and adhere to certain established standards, guidelines and procedures.

There is currently no definition for a "qualified appraiser". However, there are certain criteria one should look for when hiring a valuation analyst. First and foremost, a valuation professional should be accredited. The four organizations that have business valuation designations are as follows:

  • American Institute of Certified Public Accountants’ (AICPA) Accreditation in Business Valuation (ABV)
  • The National Association of Certified Valuation Analysts (NACVA) Certified Valuation Analyst (CVA) or Accredited Valuation Analyst (AVA)
  • American Society of Appraisers (ASA) Accredited Member (AM), Accredited Senior Appraiser (ASA) and Fellow Accredited Senior Appraiser (FASA)
  • Institute of Business Appraisers (IBA) Accredited by IBA (AIBA, Certified Business Appraiser (CBA), Master Certified Business Appraiser (MCBA) and Business Valuator Accredited for Litigation (BVAL)
Most certifications require either one or a combination of the following: an exam, submission of valuation report(s), accreditation of another organization and an experience requirement. If the potential appraiser has one or more of these accreditations, you can have a certain level of comfort that the appraiser has received adequate training to perform the engagement. However, designations alone should not be the sole factor in determining if an appraiser is "qualified". 

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