What Do I Need to Know About Business Appraisers?
Question: What Do I Need to Know About Business Appraisers?
Answer:
A business appraiser is a special kind of appraiser, one who values businesses.
How are Business Appraisers Qualified?
Like other appraisers, business appraisers must be licensed in the state in which they do business, through their state appraiser regulatory board. To become licensed, a business appraiser must pass an examination based on knowledge of appraisal terms and practices and according to the Universal Standards of Professional Appraisal Practices (from the Appraisal Foundation).
What Types of Certifications Can a Business Appraiser Have?
There are several certifications which a business appraiser might obtain in the U.S.:
What are the Requirements for Business Appraisers?
Business appraisers, like other appraisers, are required :
What Do Business Appraisers Actually Do?
A business appraiser is like a financial detective. He or she reads and dissects business financial documents, like the balance sheet and income statement, looks at the physical property and intellectual property owned by the business, and questions officers, directors, and management about the operation of the company.
The business appraiser writes up a report and discusses it with the client. The report may be preliminary or it may be detailed, depending on the level of detail required or the stage of the business negotiation process.
How Much Does a Business Appraiser Charge?
The amount charged by the appraiser depends on the type of report and the level of detail specified by the client. A short preliminary report might be less than $1000. A detailed final report might be over $10,000.
Here are some factors to help you decide which appraiser is right for you?
You should discuss:
Back to Business Valuation 101
Answer:
A business appraiser is a special kind of appraiser, one who values businesses.
How are Business Appraisers Qualified?
Like other appraisers, business appraisers must be licensed in the state in which they do business, through their state appraiser regulatory board. To become licensed, a business appraiser must pass an examination based on knowledge of appraisal terms and practices and according to the Universal Standards of Professional Appraisal Practices (from the Appraisal Foundation).
What Types of Certifications Can a Business Appraiser Have?
There are several certifications which a business appraiser might obtain in the U.S.:
- Certified Business Appraiser (CBA) from the Institute of Business Appraisers
- Accredited Senior Appraiser from the American Society of Appraisers
- CPA/ABV - CPA with an Accreditation in Business Valuation from the American Institute of Certified Public Accountants (AICPA)
- Certified Valuation Analyst, the National Association of Certified Valuation Analysts (NACVA)
What are the Requirements for Business Appraisers?
Business appraisers, like other appraisers, are required :
- To be independent and objective
- To keep their reports confidential
- To use up-to-date industry information in the preparation of reports
- To be clear about the fees they charge
- To discuss dispute resolution processes with their clients.
What Do Business Appraisers Actually Do?
A business appraiser is like a financial detective. He or she reads and dissects business financial documents, like the balance sheet and income statement, looks at the physical property and intellectual property owned by the business, and questions officers, directors, and management about the operation of the company.
The business appraiser writes up a report and discusses it with the client. The report may be preliminary or it may be detailed, depending on the level of detail required or the stage of the business negotiation process.
How Much Does a Business Appraiser Charge?
The amount charged by the appraiser depends on the type of report and the level of detail specified by the client. A short preliminary report might be less than $1000. A detailed final report might be over $10,000.
Here are some factors to help you decide which appraiser is right for you?
You should discuss:
- Try to find someone who has experience in valuing businesses in your industry. Some business appraisers specialize in certain industries; others are more general but have more experience in certain industries.
- Ask about training and certification and about experience in business valuation.
- Ask about fees and be specific about what you expect to receive for that fee.
- Discuss your role in working with the appraiser. What will be required of you? What information will you need to provide? How will you participate in the valuation?
Back to Business Valuation 101
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