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FAQs – We have the answers to your valuation questions.

We’d love to talk to you in person to understand your specific needs. As an overview, we’ve provided answers to some of the most commonly asked questions. This is a very personal business, so if you don’t find the answer to your question, please lets talk in person.

How do you earn business valuation credentials?

http://www.cfainstitute.org/programs/cfaprogram/Pages/index.aspx

To earn business valuation credentials, a professional must complete all of the following:

  • Meet the CFA Program entrance requirements and enroll in the program;
  • Complete the course of study and pass the three levels of exams;
  • Pledge to adhere to the CFA Institute Code of Ethics and Standards of Professional Conduct;
  • Have four years of qualified investment work experience; and
  • Become a regular member of CFA Institute and apply for membership to a local CFA member society.

The CFA Program is organized into three levels, each culminating in a six-hour exam. Completing the program takes most candidates between two and five years. The American Society of Appraisers (ASA) confers two designations upon qualified candidates – the Accredited Member (AM) designation and the Accredited Senior Appraiser (ASA) designation.
http://www.appraisers.org/Accreditation

To qualify for Accredited Senior Appraiser (ASA) status, an individual must have a minimum of five (5) years of full-time appraisal experience or the equivalent.  At least two (2) years of full-time appraisal experience or the equivalent are necessary for Accredited Member (AM) status.
In general, each Candidate for a designation with ASA must have a four-year college degree or its equivalent (equivalencies are described in detail within each discipline accreditation guide).  The Business Valuation discipline also requires the Candidate to pass a set of four (4) Principles of Valuation courses which lay the foundation for the remainder of the accreditation process.

The submission of an appraisal report is a significant factor in the evaluation of the total accreditation application and should support and define the experience, education and appraisal qualifications of each applicant.  Accreditation is awarded to those candidates who demonstrate proficiency in performing complex appraisal assignments. ASA’s International Board of Examiners will issue a final decision on all accreditation applications after all factors (experience, education, examination and appraisal reports) have been considered.

Who is a qualified appraiser?

The Quist team has qualified appraisers who hold business valuation credentials including the CFA charter and the ASA designation.

  • According to the IRS, a qualified appraiser is an individual who meets all the following requirements.
    http://www.irs.gov/publications/p561

    • The individual either:
      a.  Has earned an appraisal designation from a recognized professional appraiser organization for demonstrated competency in valuing the type of property being appraised, or
      b.  Has met certain minimum education and experience requirements. For real property, the appraiser must be licensed or certified for the type of property being appraised in the state in which the property is located. For property other than real property, the appraiser must have successfully completed college or professional-level coursework relevant to the property being valued, must have at least 2 years of experience in the trade or business of buying, selling, or valuing the type of property being valued, and must fully describe in the appraisal his or her qualifying education and experience.
    • The individual regularly prepares appraisals for which he or she is paid.
    • The individual demonstrates verifiable education and experience in valuing the type of property being appraised. To do this, the appraiser can make a declaration in the appraisal that, because of his or her background, experience, education, and membership in professional associations, he or she is qualified to make appraisals of the type of property being valued.
    • The individual has not been prohibited from practicing before the IRS under section 330(c) of title 31 of the United States Code at any time during the 3-year period ending on the date of the appraisal.
    • The individual is not an excluded individual. In addition, the appraiser must complete Form 8283, Section B, Part III. More than one appraiser may appraise the property, provided that each complies with the requirements, including signing the qualified appraisal and Form 8283, Section B, Part III.
  • Do you value real estate or fixed assets?

    Quist is solely a business valuation firm. We value both operating companies and holding companies. However, our network of valuation specialists is vast and we can help you assimilate the right team for your needs.

    Do you specialize in any specific industry sector?

    No, Quist does not focus on any one industry. However, our team of analysts have a wide range of experience and have specific industry expertise.

    What will my business valuation report look like?

    The reporting requirements for business valuations can vary depending on the purpose of the valuation engagement. In many cases a comprehensive report which follows the Uniform Standards of Professional Appraisal Practice (“USPAP”) standards is required, which is intended for use by persons not familiar with the underlying business. USPAP contains the generally accepted standards for professional appraisal practice in North America, as developed by the Appraisal Standards Board (“ASB”) of the Appraisal Foundation. USPAP-compliant reports may contain detailed descriptions of the assumptions, analysis and conclusions of the appraisal.

    Other valuation engagements, including ASC 820 engagements, have a specific purpose, user and reporting requirement. Depending on the type of valuation engagement, our work product can range from short letters, financial schedules and brief reports to comprehensive reports exceeding 100 pages in length. Don’t worry if you are unsure which type of report is the right fit for your needs. We are experienced with many different valuation engagements and can help you and your legal counsel navigate reporting requirements.

    How much does a valuation cost?

    We realize that each client’s situation is unique. However, there are several factors that play a critical role in the process. These factors add or subtract from the complexity of the valuation process and directly impact the fee. Our fees are based on factors specific to each client including:

    • The complexity of the capital structure
    • The quality of financial reporting
    • The nature of the business and industry in which our client competes

    What is the estimate time frame for completion of a valuation?

    From beginning to end, the process typically takes comfortably between 4 – 6 weeks. However, scope of work and deliverable can vary the time required.

    What documents do you need for a valuation?

    A standard document request list includes:

    • Historical financial statements for the last five fiscal years;
    • Most recent interim financial statements;
    • Most recent budget/projections;
    • Current ownership table;
    • A list of key members of management and a description of their roles;
    • A copy of the entities most recent articles of incorporation, operating agreement, bylaws and any shareholder agreements; and
    • A copy of any recent board materials or company presentations.

    What is the valuation process?

    Our process includes:

    • Engagement and document request
    • Review of financial statements and company documents
    • Management interview with key members
    • Internal valuation meeting
    • Quality control and review by two senior members of the Quist team
    • Delivery of draft report
    • Q&A with client regarding methodologies and approaches utilized in the report
    • Delivery of final report