This is a formal presentation of the value of a business in a self-contained written report. If a valuation has the potential to go to court, or if the report needs to be reviewed by others, such as the IRS for tax implications, this type of report explains in full detail how the value was derived. Uniform Standards of Professional Appraisal Practice (USPAP) and American Society of Appraisers (ASA) address the above as a “Comprehensive, Written Business Valuation Report”. The Institute of Business Appraisers (IBA) addresses the above as a “Formal Written Report”.
Although USPAP and the American Society of Appraisers address only a single format for written reports, many practitioners (including GCF Valuation) offer a “summary report”. The Institute of Business Appraisers acknowledges this report in IBA BV Standard 4.1 and notes that, “By its nature, the letter form of report is an instrument of brevity.”
While we’re still required to perform the same investigation and analysis as would be required for a complete appraisal, this shorter summary document takes less time to prepare. Our summary reports are usually between 30 and 60 pages.
Although USPAP has eliminated language referring to “Limited Appraisal”, the American Institute of Certified Public Accountants (AICPA) recognizes a “Calculation of Value” also known as “Value Calculations”. A calculation of value is NOT an appraisal because the appraiser is not coming to a “conclusion of value”, but merely a “calculation of value” based on a limited amount of investigation and due diligence. Although a Calculation of Value does not meet USPAP or IBA Standards, it can be a very valuable tool for business owners or professionals.
Often, we are asked to review and critique a report issued by another appraiser. A letter describing the review and critique is typically issued.