Do I Need a Calculation or a Full Study?

How do you know when you need a full study or if a calculation of business value will be sufficient? For business sale or dissolution, business merger, a transfer of ownership or a divorce, spend your time – and money – wisely when determining the value of your business.

In this video, Manager Andrew Labosier, CPA, CVA shares which valuation reports are necessary in different situations and why.

Connect with an experienced team who can support you.

See three reasons for a business calculation of value.

If you prefer to read this content, the video transcript is below.

One of the questions we get a lot is, “Do I need a calculated value or a full valuation report?”

These two types of reports are on opposite ends of the spectrum. On one side, we have a calculated value report, which is more limited in scope and typically more cost-effective. These types of reports allow us the flexibility to work with clients in developing cash flow projections and the type of model they want to use in similar items.

These types of reports are most usually used for buy-sell agreements, the issuance of stock and most typically, the business owners’ curiosity.

On the other side of the spectrum, we have a full valuation report. These types of reports are our opinion of value, and they are not limited in scope. We’re going to consider multiple evaluation approaches, economic and industry drivers and similar items. These types of reports are most used for gift tax returns, estate tax returns and court proceedings.

If you have any questions about what type of report is most applicable to your situation, please reach out to our team and let us know how we can help.