Business Valuations Appraisal

Business Valuations Appraisal

Valuations Business Appraisal

Tuesday, April 01st, 2008 8:14am

Valuations business appraisals or business valuations including machinery and equipment, client list, logos, trademarks, inventory and buildings are included in a business valuation or business appraisal. The worth of the business is much more difficult to ascertain than valuing stocks and bonds. Valuations business appraisal is an all-inclusive business appraisal of tangible and intangible assets of the business and its potential to earn profits in the opinion of the valuations business appraisal expert. If your company is not a public traded company, the valuations business appraisal will require an accredited appraiser to compile the history of your company and apply the correct methodology that is compliant with government excepted rules and standards. If the business is being sold, acquired, merging, seeking a loan, raising capital, or is involved in the partnership or marital dissolution, a valuations business appraisal will be desired by an accredited appraiser who is also an expert appraisal witness.

If the purpose for your business appraisal (listed above) has the slightest chance of entering into litigation your valuations business appraisal needs to be prepared by an expert appraisal witness that is qualified by the court to irrefutability defend your business appraisal. Because the valuations business appraisal is not a science, but an opinion of a qualified expert you must consider the appraiser doing the valuations business appraisal, and his expertise before choosing a valuations business appraiser. Your choice for a valuation business appraiser should be:

  • 1. one who has adequate successful experience in business appraisals. Fussell Valuation Associates has 30 years experience preparing valuations business appraisals.
  • 2. a prequalified expert appraisal witness. Fussell Valuation Associates has been excepted and testified successfully numerous times, defending valuations business appraisals, divorce appraisals as well as other sundry appraisals. We work as appraisal consultants, participate in depositions, mock trial and courtroom testimony.
  • 3. an accredited appraiser of machinery and equipment, commercial buildings, and have a team of associates that cover any aspect of appraisal knowledge. Fussell Valuation Associates has seven Senior Professional Appraisers that excel in every genre of appraisal with over 70 years combined valuations business appraisal, divorce appraisal, machinery and equipment appraisal, decedent estate appraisal, antique appraisal as well as being accredited with ASA, NAPA, NAA and we are expert appraisal witnesses.
  • 4. valuations business appraiser who is willing to travel to the assets of the business to accurately value the real and personal property of the business. Fussell Valuation Associates has the ability to include their team of professional appraisers for any nationwide/international valuations business appraisal. We Travel.
  • 5. an appraiser that is surrendering valuations business appraisal reports compliant with the latest laws, standards and rules. All Fussell Valuation Associates have completed the 2008- 2009 USPAP 15 hour course and successfully passed the USPAP test. One of our Senior Professional Appraisers teaches the Government USPAP course and test to appraisers nationwide.

Call us at 480 463 6579

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Business Valuation Definition

Friday, February 22nd, 2008 12:09pm

A Business Valuation of your private business has the same objective as valuing real estate or stock. What is the value of the business in an unforced sale? Because your firm may be unique, private or public, there may be no comparables, no tables or guides one could use to value your business. However, as accredited business valuation appraisers, Fussell Valuation Associates use the industry standards and apply the latest laws to achieve your business valuation that is accepted and defendable should litigation arise. With a total of 70 years combined experience and continued education programs, Fussell Valuation Associates provides all the skill required to value your business in a business valuation report. BECAUSE OF THE RECENT CHANGES IN THE USPAP STANDARDS, unless your CPA is an accredited USPAP compliant APPRAISER your CPA cannot legally appraise and/or be a legal expert should litigation arise.

Valuation methods for business valuations typically use one of the three following appraisal approaches: the asset approach, the market approach, or the income approach.

The appraiser will reconcile the various values rendered from each appraisal method in order to determine the most accurate value for your company.

Once the business valuation has been completed, only an Accredited USPAP appraiser can certify the value for IRS purposes, litigation and banking use.

The frequently asked questions of:

  • Should I buy software to get my business valuation? or
  • Wouldn’t it be Ok if I just got the $299 business valuation Online?

Both of these questions can be answered easily. If you are going to use these boiler plate business valuations for your personal use, no one else will rely on this report, EVER, then they are OK to use. If there is any chance a second person will rely on the same report, then it is safe to assume 3 years from now litigation could happen. YOU SHOULD ONLY USE A CERTIFIED 2008-2009 USPAP Report prepared by an accredited appraiser that will also be available to testify as an expert appraisal witness in court for the defense of your business valuation.

Business valuations are typically needed for:

  • To Buy or Sell a Business,
  • Raising Capital,
  • Loans,
  • Partnership / LLC
  • Shareholder Relationships / Disputes
  • Insurance
  • Decedent Estate,
  • Estate and Succession Planning
  • Divorce,
  • Liquidation,
  • Acquisition / Merger,
  • Auction

If you have further business valuation questions, contact us, phone: 480 463 6579

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Business Valuations with Intangible Assets

Wednesday, February 27th, 2008 5:49pm

Your Business Valuation will include machinery and equipment appraisal and all assets including the business intangible assets. Intangible assets can include:
• Below market leases;
• Beneficial contracts;
• Copyrights;
• Goodwill and good standing due to previous success;
• Franchise agreements;
• In-house developed software;
• Patents and applications for patents;
• Proprietary lists;
• Ownership of trademarks and brand names; and
• Subscriptions and service contracts

Intangible assets are highly important factors when creating a business valuation. In some business valuations the intangible assets are valued at more than the tangible assets and so for this reason, simply basing a business valuation upon financial statements means that the business valuation is unlikely to accurately reflect a true value.

In order for an accurate business valuation to be performed, a business appraiser will require the following information in order to conduct the business valuation:
• Accounting methods;
• Actual or potential litigation;
• All share transactions;
• Contracts in force;
• Current and future marketing strategies;
• Current financials;
• Customer relations details;
• Forecast of business growth at time of valuation;
• Industry information;
• Insurance;
• History;
• Key personnel and management details;
• Major competition;
• Ownership details;
• Past, current and future financing status;
• Services and/or products supplied by the business; and
• Supplier details

These details, combined with intangible asset details, allow a business appraiser to perform an accurate business valuation that is irrefutable should the business valuation be dissected in litigation.

Fussell Valuation Associates bring decades of experience and the latest 2008-2009 USPAP compliance to insure that you will receive an accurate business valuation and we are willing to give expert appraisal witness testimony should it be needed in the future.
Phone : 480 463 6579

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Business Valuation Approaches

Monday, March 03rd, 2008 7:58am

Business Valuation Approaches, of which there are usually three, will be used for a business valuation: the asset approach, the income approach or the market approach.

The asset approach: The individual assets of the company are reviewed. Often, the adjusted book value method is used during this type of business valuation. This method does have a draw back though, as intangible assets are not measured in this approach. Should a company have a large amount of intangible assets, an appraiser may use a hybrid method, combining the asset approach with the excess earnings method, allowing any intangible assets to be included. This hybrid approach will provide a more accurate business valuation where a company has many intangible assets.

The income approach: Either the capitalization of cash flow or the discounted cash flow method may be used. The income approach does sometimes pose a problem, as the capitalization or discount rate to be used must be estimated. This rate is used to measure the risk that needs to be applied to the projected cash flow or income.

The market approach: Businesses in the same, or a similar industry are used to create valuation multiples that can be applied to a company for business valuation purposes. Private company sales, public company sales or stock prices may be used to construct the valuation multiples.
There are formulas that exist that allow businesses in particular industries to estimate their value. However, these are estimations only, and usually include a large scale of possible values, and so should be used as a guide only, and not an actual business valuation.

Regardless of the business valuation appraoch that is used, the business valuation must also comply with the new 2008-2009 USPAP Standards and Rules. Fussell Valuation Associates assure that your business valuation will be understandable, USPAP compliant, and we offer expert appraisal testimony should litigation arise. Fussell Valuation Associates has 70 years combined valuation experience with several instantces where we gave irrefutable expert testimony.

Give us a call. Phone 480 463 6579.

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Pension Valuations

Thursday, March 13th, 2008 3:57pm

Pension Valuation is for the asset that is overlooked most in divorce proceedings. When dividing the assets between a divorcing couple, pensions and any kind of retirement plans such as 401K, Keogh and IRS need to be divided equitably –known as equitable distribution. Some pension valuation methods only review that portion of the pension plan that has accrued during the marriage until the Complaint for Divorce is filed (Deferred Method).

With this method of pension valuation, it is important to assess any cost-of living increases and any appreciation that would be occurring on this portion earned during the marriage, but distributed in the future. That is why present value of the pension is not enough to determine pension valuation. Future payment of the currently earned pension will usually be eligible for cost of living increases. The present amount of the pension should increase in value between the time of the divorce and the time of actual payment. That increase in value is subject to be divided equitably and accounted for in the pension valuation.

The simple way to determine pension valuation by getting the pension balance is appropriate for determining the value of 401k plans, Keogh plans, and IRA’s. Annuities and pension valuation is more challenging. The right until death to receive monthly payments upon retirement is usually how a pension is defined.

However there are more benefits that a pension valuation needs to consider. Often after the pensioner dies, the surviving spouse will continue to receive benefits. These future payments to the spouse can be included in the pension valuation.

One way to do pension valuation (or the portion acquired during the marriage) is to determine the amount of money it was take to purchase an annuity (single premium) through an insurance company to give a benefit equal to what the pension would yield.

Published mortality tables are of use in another pension valuation method. The date of death can be determined from the mortality table. Pension valuation would then value the total of the monthly payments estimated. A discount of the total using the interest rate needs to be factored in, to determine present day value for the pension valuation.

Tax consequences need to be reviewed in any pension valuation. How was the pension funded? If payments into the pension were made with after tax dollars, the pension will not be taxed as it is paid out in the future. If payments into the pension were made with pre-tax dollars, then all of the payout will be taxed. That is a significant impact on the value. Pension valuations need to carefully evaluate any pension plan, as some plans are combinations of pre-tax and after tax payments. This of course will make the pension valuation more complex.

For Pension Valuation call Fussell Valuation Associates. Seven Senior Professional Appraisers with a total of 70 years experience in appraisals. We do valuations nationwide! Call 480 463 6579 for all valuation questions including business valuations, decedent estate appraisals, machinery & equipment appraisals, marital asset dissolution appraisal and much more. We also provide Expert Appraisal Witness Testimony.

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Business Valuation Risk Factors

Wednesday, March 05th, 2008 7:57am

Business Valuation Risk Factors Defined: In addition to the appraisal approaches, risks must also be taken into account when performing a business valuation. Risk factors will vary between companies, industries, and are likely to change over time. Generally, risks are categorized into three groups: business risk, financial risk and liquidity risk.

    Business risk: This is applied to all factors that may affect forecasted earnings. This includes any issue that may impact upon administrative and operating expenses, cost of sales and sales. Business risk is normally determined on a company specific basis, and requires the appraiser to understand the competition, industry, management focus and working capital of the company.
    Financial risk: This is applied to interest expense, which has the capability of affecting forecasted pre-income tax earnings. Financial risk is nearly always developed to be company specific and is assessed on a businesses asset base. Financial risk is considered to be minimal if the business if financed mainly by equity. Financial risk will likely be considered to be medium to high if the business is financed mainly with debt.
    Liquidity risk: This is applied to the process of disposing of a business at fair market value. Liquidity risk is not company specific, and is based upon the current industry.

Exact appraisal methods, conducted by a business appraiser, combined with an appraisal of risk factors for the business, are required to provide a company with an accurate business valuation. For this reason, a business valuation should always be conducted by a skilled business appraiser. Fussell Valuation Associates are skilled with seven Senior Professional Appraisers that have conducted business valuations for the past 30 years. Fussell Valuation Associates are USPAP 2008 - 2009 compliant and offer expert appraisal testimony should your valuation need irrefutable defense.

Give us a call. Phone: 480 463 6579

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Business Valuations, the appraisal with litigation support.

Wednesday, February 20th, 2008 8:26pm

Business valuations for insurance, divorce, merger, sale, liquidation or natural disaster are just a few reasons Fussell Valuation Associates are chosen especially if there is a chance of litigation on the horizon.

When a business, personal property or real property, is divided or changes hands, it is imperative to ascertain a value that can be defended. In most cases a timely certified appraisal will speed negotiations and avoid litigation and dispel disputes among interested parties.

The individual with the fiduciary responsibility of conducting divorce or estate proceedings for a business, personal property or real property should consult an accredited appraiser. A certified appraisal is the most instrumental tool for the attorney or trustee to use to prevent negotiations from breaking down and to prevent litigation.

Fussell Valuation Associates have been providing valuations for 31 years producing appraisals for intangible, tangible, personal and real properties using USPAP Standards and Rules. Some of the reports were litigated and we also supplied irrefutable Expert Testimony.

Phone: 480 463 6579

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Machinery and Equipment Appraisals

Monday, February 25th, 2008 8:45am

Machinery and Equipment Appraisals are needed for raising capital, loans and asset value. Most clients soon realize that the Machinery and Equipment Appraisal is portion of a Business Valuation and that a complete business appraisal better fits their needs. Some lending institutions need an annual Machinery and Equipment Appraisal to keep the loan note in force.

If you are a Business owner, Attorney, Trustee, Banker, Lender or Broker in need of a timely and accurate machinery and equipment appraisal for any of the following reasons:
operating capital, litigation, divorce, mergers, partnership buyouts, business dissolutions, acquisitions, auctions, disposal surplus sale, inventory liquidation, establishing lines of credit,
then you will need an appraisal firm that has enough experience in machinery and equipment appraisal, certified in current law applications (USPAP 2008), and an appraiser that is willing and experienced to give testimony as an expert appraisal witness should it be necessary.

Fussell Valuation Associates have been appraising businesses and doing Machinery and Equipment Appraisals for the past 30 years. All appraisers are USPAP 2008 - 2009 compliant. Should you need testimony to support our appraisals, we are expert appraisal witnesses with irrefutable experience in depositions and courtroom testimony.
Call or email for more information.
480 463 6579

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