Statement Standards Presentation mama bearv2

A Presentation and Discussion on theAmerican Institute of Certified Public AccountantsStatement on Standards for Valuation Services No. 1: 

A Presentation and Discussion on the American Institute of Certified Public Accountants Statement on Standards for Valuation Services No. 1 'Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset'

AICPA Statement on Standards for Valuation ServicesPresentation and Discussion Outline: 

AICPA Statement on Standards for Valuation Services Presentation and Discussion Outline Purpose and objective of this presentation Purpose, objective, and benefits of the Statement on Standards for Valuation Services ( 'SSVS No. 1' or the 'Statement') History of the development and approval of SSVS No. 1 SSVS No. 1 valuation terminology Application of the Statement to client engagements Business valuation (BV) engagement acceptance considerations BV engagement analysis requirements Valuation approaches and methods BV engagement reporting requirements Other contents of the Statement Summary and conclusion; questions and discussion

AICPA Statement on Standards for Valuation ServicesIntroductory Comments: 

AICPA Statement on Standards for Valuation Services Introductory Comments Introduction of the presenter On behalf of the AICPA business valuation (BV) committee, we are pleased to present SSVS No. 1 The results of many years of debate and development, the Statement will benefit all AICPA members all AICPA BV practitioners all AICPA member valuation clients the general business valuation profession Members performing tax-related valuations that must comply with IRS 'qualified appraisal' regulatory requirements courts, regulators, taxing authorities, investors, and others who rely on business valuations This presentation will discuss both the conceptual foundation and the practical application of the Statement We want this presentation to be as informative as possible; we encourage your questions and discussion

AICPA Statement on Standards for Valuation ServicesPurpose and Objective of this Presentation: 

AICPA Statement on Standards for Valuation Services Purpose and Objective of this Presentation We want to accomplish the following objectives: to explain why the Statement was issued (i.e., the SSVS benefits) to explain how the Statement was developed and approved to explain what the Statement is intended to do to explain when the Statement does (and does not) apply to explain the terminology used in the Statement to explain how the Statement affects planning for the BV engagement to explain how the Statement affects performing the BV engagement to explain how the Statement affects reporting on the BV engagement We want you to understand what the Statement means to you

AICPA Statement on Standards for Valuation ServicesPurpose and Objective of SSVS No. 1: 

AICPA Statement on Standards for Valuation Services Purpose and Objective of SSVS No. 1 Business valuations are performed for purposes of: transactions – bankruptcy financings – management planning taxation – litigation support financial accounting – other All AICPA members will follow the Statement when they perform an engagement to estimate a value that results in an expression of: a conclusion of value – a calculated value The Statement is intended to: provide AICPA members with professional guidance represent 'best practices' in BV services improve the consistency and quality of BV practice improve the transparency and replicability of BV reports

AICPA Statement on Standards for Valuation ServicesHistory of the Development of SSVS No. 1: 

AICPA Statement on Standards for Valuation Services History of the Development of SSVS No. 1 The Statement development process started in 2001 An AICPA BV committee standard writing task force was involved in the SSVS development for a 6-year period Numerous AICPA BV practitioners were consulted for input The first exposure draft was issued in 2005 The revised exposure draft was issued in 2006 The Statement was issued in 2007 The Statement is effective for all members who accept an engagement to estimate value after January 1, 2008

AICPA Statement on Standards for Valuation ServicesHistory of the Development of SSVS No. 1: 

AICPA Statement on Standards for Valuation Services History of the Development of SSVS No. 1 The following AICPA groups were consulted in the development of the Statement: Tax Executive Committee SSARS Committee Auditing Standards Committee Members in Industry Committee PFP Executive Committee PCPS Executive Committee Business Valuation Committee Forensic andamp; Litigation Committee Consulting Services Executive Committee BV/FLS Executive Committee AICPA General Counsel

AICPA Statement on Standards for Valuation ServicesExpected Member Benefits from the Application of SSVS No. 1: 

AICPA Statement on Standards for Valuation Services Expected Member Benefits from the Application of SSVS No. 1 The Statement provides professional guidance as to generally accepted 'best practices' within the valuation community. The Statement reduces member uncertainty as to what level of analyses and/or what content of reports are appropriate. In defending the valuation work during a contrarian challenge, the member will have the assurance that his or her analysis and report are prepared in accordance with the Statement. Members should benefit from a common vocabulary. The Statement adopts a glossary and a set of valuation terminology that should allow members to more effectively and efficiently communicate with (1) each other, (2) other (non-CPA) valuation analysts, (3) clients, and (4) other parties who rely on valuation reports. Members may rely on the Statement for professional guidance with regard to what are (and who are not) considered generally accepted valuation approaches and members. Members may rely on the Statement for professional guidance with regard to the type of documents and documentation (both financial and non-financial) that should be considered in the valuation process. Valuation analysts who provide certain tax-related valuations must comply with 'generally accepted appraisal standards' as mandated by the Pension Protection Act of 2006; the Statement provides a benchmark for such regulatory compliance.

AICPA Statement on Standards for Valuation ServicesExpected Client Benefits from the Application of the SSVS: 

AICPA Statement on Standards for Valuation Services Expected Client Benefits from the Application of the SSVS Clients can reach an unambiguous agreement with the valuation analyst regarding the level of valuation service to be performed in the engagement. The statement provides for well-defined alternative types of valuation development analyses. Clients can reach an unambiguous agreement with the valuation analyst regarding the type of valuation report to be provided. The Statement provides for several well-defined alternative types of valuation reports. The client (or other report reader) should be able to (1) replicate the data sources and the valuation approaches, methods, and procedures and (2) duplicate the value conclusion. This does not mean that the client (or another report reader) will always agree with the value conclusion; analyst judgment plays a large part in the selection of valuation variables. There should be transparency in the valuation analysis and in the valuation report. This transparency should increase the client’s confidence in the valuation process and in the value conclusion. Clients should benefit from both increased consistency and comparability between different analyst’s valuation reports. As members produce valuation reports with the same general content and disclosures, it will be easier for clients to comprehend and compare valuation reports. For tax-related valuations, clients can be assured that member-prepared valuations comply with 'generally accepted appraisal standards' as required by the Pension Protection Act of 2006.

AICPA Statement on Standards for Valuation ServicesSSVS Valuation Terminology: 

AICPA Statement on Standards for Valuation Services SSVS Valuation Terminology The Statement adopts the International Glossary of Business Valuation Terms Some additional terms specific to the Statement are defined below Calculated value – An estimate as to the value of a business, business ownership interest, security, or intangible asset, arrived at by applying valuation procedures agreed upon with the client and using professional judgment as to the value or range of values based on those procedures Calculation engagement – An engagement to estimate value wherein the valuation analyst and the client agree on the specific valuation approaches and valuation methods the valuation analyst will use and the extent of valuation procedures the valuation analyst will perform to estimate the value of a subject interest. A calculation engagement generally does not include all of the valuation procedures required for a valuation engagement. If a valuation engagement had been performed, the results might have been different. The valuation analyst expresses the results of the calculation engagement as a calculated value, which may be either a single amount or a range.

AICPA Statement on Standards for Valuation ServicesSSVS No. 1 Valuation Terminology: 

AICPA Statement on Standards for Valuation Services SSVS No. 1 Valuation Terminology Conclusion of value – An estimate of the value of a business, business ownership interest, security, or intangible asset, arrived at by applying the valuation procedures appropriate for a valuation engagement and using professional judgment as to the value or range of values based on those procedures. Engagement to estimate value – An engagement, or any part of an engagement (for example, a tax, litigation, or acquisition-related engagement), that involves determining the value of a business, business ownership interest, security, or intangible asset. Also known as valuation service. Valuation analyst – For purposes of this statement, an AICPA member who performs an engagement to estimate value that culminates in the expression of a conclusion of value or a calculated value. Valuation engagement – An engagement to estimate value in which a valuation analyst determines an estimate of the value of a subject interest by performing appropriate valuation procedures as outlined in the Statement and is free to apply the valuation approaches and methods he or she deems appropriate in the circumstances. The valuation analyst expresses the results of the valuation engagement as a conclusion of value, which may be either a single amount or a range.

AICPA Statement on Standards for Valuation ServicesApplication of SSVS No. 1: 

AICPA Statement on Standards for Valuation Services Application of SSVS No. 1 The Statement applies to any AICPA member: who is engaged to estimate the value of a business, business ownership interest, security, or intangible asset (collectively the 'subject interest') An engagement to estimate value may result in either: a conclusion of value, or a calculated value A member who performs such an engagement is referred to as a 'valuation analyst.'

AICPA Statement on Standards for Valuation ServicesApplication of SSVS No. 1: 

AICPA Statement on Standards for Valuation Services Application of SSVS No. 1 The Statement does not apply in these situations: the value of the subject interest is provided to the member by the client or a third party and the member (1) does not apply valuation approaches and methods and (2) does not report on the value of the subject interest the member performs an engagement to calculate value as part of an audit or review engagement internal use assignments from employers to employee members not in the practice of public accounting engagements that are exclusively for the purpose of determining economic damages (unless that determination is also used to estimate the value of a subject interest) mechanical computations that do not rise to the level of engagement to estimate value (i.e., where the member does not apply valuation approaches and methods and use professional judgment) where it is not practical or reasonable for the member to obtain or use relevant information and the member is unable to apply valuation approaches and methods A jurisdictional exemption, when the Statement differs from published governmental judicial or accounting authority

AICPA Statement on Standards for Valuation ServicesValuation Engagement Considerations – Competence: 

AICPA Statement on Standards for Valuation Services Valuation Engagement Considerations – Competence AICPA Code of Professional Conduct Rule 201A applies: A member must have the professional competence to perform any client service Performing a valuation engagement with professional competence involves special knowledge and skill A valuation analyst should possess (1) a level of knowledge of valuation principles and theory and (2) a level of skill in the application of such principles that will enable him or her to: (a) identify, gather, and analyze the necessary data, (b) consider and apply the appropriate valuation approaches and methods, and (c) use professional judgment in developing the estimate of value

AICPA Statement on Standards for Valuation ServicesValuation Engagement Considerations—Minimum Considerations Before Accepting the Engagement: 

AICPA Statement on Standards for Valuation Services Valuation Engagement Considerations— Minimum Considerations Before Accepting the Engagement In determining his/her professional competence, the valuation analyst should consider: Subject entity and subject industry Subject interest Valuation date Scope of the valuation engagement, including Purpose of the valuation Any assumptions and limiting conditions Applicable standard of value Type of report to be issued Intended use and users Restrictions on the use of the report Governmental regulations or other professional standards that apply to the engagement

AICPA Statement on Standards for Valuation ServicesValuation Engagement Considerations—Member Objectivity and Independence: 

AICPA Statement on Standards for Valuation Services Valuation Engagement Considerations— Member Objectivity and Independence Objectivity is required in all professional services; the valuation analyst must comply with: AICPA Code of Professional Conduct Rule 102 'Integrity and Objectivity' Obligation for the valuation analyst to be impartial, intellectually honest, disinterested, and free of conflicts of interest So as not to impair the member’s independence with respect to the client in an attest engagement, the valuation analyst must comply with: AICPA Code of Professional Conduct Rule 101 'Independence' Rule 101 Interpretation No. 101-3 'Performance of Nonattest Services'

AICPA Statement on Standards for Valuation ServicesValuation Engagement Considerations—Other Engagement Considerations: 

AICPA Statement on Standards for Valuation Services Valuation Engagement Considerations— Other Engagement Considerations Valuation analyst should establish an understanding with the client Can be oral (with workpaper documentation) or written Scope restrictions on the valuation analyst’s work or on data availability Must be disclosed in the valuation report Use of the work of specialists Valuation analyst may rely on third party specialists such as real estate or equipment appraisers Valuation analyst should disclose (in the assumptions and limiting conditions report section) the level of responsibility for the work of third party specialists The valuation analyst should also comply with the professional requirements of any other BV organization in which he/she is a member

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Two Types of Engagements: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Two Types of Engagements The Valuation Engagement This engagement calls for the valuation analyst to estimate the value of the subject interest Valuation analyst follows the development section of SSVS No. 1 and is free to apply the appropriate valuation approaches Results are expressed as a 'conclusion of value'—either as a single amount or a range of values The Calculation Engagement Valuation analyst and client agree on (1) the valuation approaches and methods to use and (2) the extent of procedures to perform Valuation analyst calculates value using the agreed upon procedures Results are expressed as a 'calculated value'—either as a single amount or a range of values

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Hypothetical Conditions: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Hypothetical Conditions Hypothetical conditions may be required in some circumstances Hypothetical conditions may apply to both (1) valuation engagements and (2) calculation engagements Valuation analyst should (1) indicate the purpose of the hypothetical conditions and (2) disclose these conditions in the valuation report or the calculation report

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Analysis of the Subject Interest: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Analysis of the Subject Interest The minimum information the valuation analyst needs to analyze the subject interest depends on: Nature of the subject interest Scope of the valuation engagement Valuation date Intended use of the valuation Applicable standard of value Applicable premise of value Any assumptions and limiting conditions Applicable government regulations or other professional standards

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Nonfinancial Information: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Nonfinancial Information The valuation analyst should obtain sufficient nonfinancial information to understand the subject interest, including: Nature, background, and history of the entity (or intangible asset) Facilities of the entity Organizational structure Management team (officers, directors, and key employees) Classes of equity ownership and their applicable rights Products and/or services Economic environment Industry markets Key customers and key suppliers Competition Business risks Business strategy and future plans Governmental or regulatory environment

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Ownership Information: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Ownership Information The valuation analyst should obtain and analyze sufficient ownership information in order to: Determine the type of ownership interest and whether it is a control, majority, or minority ownership interest Analyze the ownership interests of other owners and their impact on the value of the subject interest Understand the classes of ownership interest and the rights assigned thereto Understand the rights included in, or excluded from, each intangible asset

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Ownership Information (continued): 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Ownership Information (continued) The valuation analyst should obtain and analyze sufficient ownership information in order to: Understand any other matters that may affect value, such as: For business interests Shareholder agreements Partnership agreements Operating agreements Voting trust agreements Buy-sell agreements Loan covenants Restrictions and other contractual obligations For intangible assets Licensing agreements Sublicense agreements Nondisclosure agreements Development rights Commercialization or exploitation rights Other obligations

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Financial Information: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Financial Information The valuation analyst should obtain and analyze applicable and available financial information, such as: Historical financial information and key financial ratios and statistics Prospective financial information Comparative summaries of financial statements or other information Common size financial statements Comparative size industry financial information Income tax returns Owner compensation, including benefits and personal expenses Key person or officer life insurance Information on advantageous or disadvantageous contracts Contingent or off-balance sheet assets or liabilities Prior sales of the subject entity interests (or intangible asset) The valuation analyst should read and evaluate the information in order to determine if it is reasonable for purposes of the engagement

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Other Engagement Considerations: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Other Engagement Considerations Conclusion of value Correlate, reconcile, and assess the reliability of the results from different valuation approaches and methods Determine whether the value conclusion should be based on one method or on a combination of methods Subsequent events Defined as: an event that occurs subsequent to valuation date but prior to issuance of valuation report The valuation analyst should consider two types of subsequent events: Analyst should consider events indicative of conditions that are known or knowable on the valuation date Analyst should not consider (but may disclose) events that are not indicative of conditions that are known or knowable on the valuation date

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Other Engagement Considerations (continued): 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Other Engagement Considerations (continued) Valuation engagement documentation may include: Information gathered and analyzed Any assumptions and limiting conditions Any restrictions on the scope of work or the availability of data The basis for any valuation assumptions Valuation approaches and methods used Any subsequent events considered How any 'rule of thumb' was considered

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Other Engagement Considerations (continued): 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Other Engagement Considerations (continued) Calculation engagement considerations include: Identity of the client Identity of the subject interest Ownership control and marketability elements Purpose and intended use of the calculated value Intended users of report and any limitations on report use The valuation date Applicable standard of value Applicable premise of value The sources of information used Valuation approaches and methods agreed on with client Any subsequent events

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Valuation Approaches and Methods: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Valuation Approaches and Methods The valuation analyst should use valuation approaches and methods that are appropriate to the engagement The valuation analyst should consider the three generally accepted valuation approaches: For business and security valuations income approach market approach asset-based approach For intangible asset valuations income approach market approach cost approach

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Income Approach Valuation Methods: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Income Approach Valuation Methods In the business valuation capitalization of benefits method (e.g., earnings or cash flow), the valuation analyst should consider: Normalization adjustments Nonrecurring revenue and expense items Income taxes Capital structure and financing costs Capital investments Qualitative judgments for risks considered to compute the discount rate and/or capitalization rate Any expected changes in future economic benefits In the business valuation discounted future benefits method (e.g., earnings or cash flow), the valuation analyst should consider: Any forecast/projection valuation variable assumptions The forecast/projected earnings and/or cash flow Estimation of the terminal value

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Income Approach Valuation Methods (continued): 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Income Approach Valuation Methods (continued) For intangible assets, the valuation analyst should also consider: Remaining useful life Current and anticipated future use Attributable rights Position in its life cycle Appropriate discount rate Appropriate contributory asset capital charge, if any Research andamp; development or marketing expense required to support intangible asset in current state Allocation of enterprise income (e.g., incremental, residual, or profit-split) Whether the income tax amortization benefit is appropriate Discounted multi-year excess earnings Market-derived royalty rates Relief from royalty analysis

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Market Approach Valuation Methods: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Market Approach Valuation Methods For a business or security valuation, the valuation analyst should consider: Guideline public company method Guideline transactions method Guideline (historical) sales of ownership interests in the subject entity For an intangible assets valuation, the valuation analyst should consider: Comparable uncontrolled transactions method Comparable profit margin method Relief from royalty method The remaining useful life of the subject intangible asset compared to the guideline intangible assets The valuation analyst should also consider: Qualitative and quantitative comparisons Arm’s-length sale/license transactions and prices Dates and consequent relevance of empirical market data

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Asset-Based Approach Valuation Methods: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Asset-Based Approach Valuation Methods For a business or security valuation, the valuation analyst should consider: Adjusted net asset method Excess earnings method The existence of (1) both tangible and intangible assets and (2) both recorded and contingent liabilities The value of (1) both tangible and intangible assets and (2) both recorded and contingent liabilities Asset liquidation costs, as appropriate

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Cost Approach Valuation Methods: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Cost Approach Valuation Methods For an intangible asset valuation, the valuation analyst should consider: The appropriate measure of cost (e.g., reproduction or replacement) The appropriate forms of depreciation and functional/economic obsolescence The remaining useful life estimate

AICPA Statement on Standards for Valuation ServicesConduct of the Valuation Engagement—Other Considerations: 

AICPA Statement on Standards for Valuation Services Conduct of the Valuation Engagement— Other Considerations Rules of thumb are not an acceptable valuation method but may be used as a reasonableness check Generally a rule of thumb should not be the only method used to value the subject interest Consider whether any valuation adjustments should be made to the pre-adjustment value Discount for lack of marketability Discount for lack of ownership control Premium for ownership control Consider any non-operating assets, liabilities, and any excess/deficient operating assets Consider the impact of lack of control of these assets/liabilities

AICPA Statement on Standards for Valuation ServicesReporting of the Valuation Engagement—Valuation Reporting: 

AICPA Statement on Standards for Valuation Services Reporting of the Valuation Engagement— Valuation Reporting A valuation report is a communication to the client containing the conclusion of value or the calculated value of the subject interest Valuation reports may be written or oral There is an exemption from the Statement reporting provisions for certain controversy proceedings, whether the matter proceeds to trial or settles before trial

AICPA Statement on Standards for Valuation ServicesReporting of the Valuation Engagement—Types of Valuation Reports: 

AICPA Statement on Standards for Valuation Services Reporting of the Valuation Engagement— Types of Valuation Reports For a valuation engagement resulting in a conclusion of value: Detailed report Summary report For a calculation engagement resulting in a calculated value: Calculation report For both types of engagements: Oral reports

AICPA Statement on Standards for Valuation ServicesReporting of the Valuation Engagement—The Detailed Report: 

AICPA Statement on Standards for Valuation Services Reporting of the Valuation Engagement— The Detailed Report The detailed report provides all sufficient information to permit report users to understand the data, reasoning, and analyses underlying the value conclusion The detailed report should include the following sections: Letter of transmittal Table of contents Introduction Sources of information used Analysis of the subject entity and related nonfinancial information Financial statement/information analysis Valuation approaches and methods considered Valuation approaches and methods used Valuation adjustments Nonoperating assets and liabilities; excess/deficient operating assets Representation of the valuation analyst Reconciliation of value estimates and conclusion of value Professional qualifications of the valuation analyst

AICPA Statement on Standards for Valuation ServicesReporting of the Valuation Engagement—The Detailed Report (continued): 

AICPA Statement on Standards for Valuation Services Reporting of the Valuation Engagement— The Detailed Report (continued) The introduction section of the detailed report should include: Identity of the client Purpose and intended use of the valuation Intended users of the valuation Identity of the subject entity Description of the subject interest Description of ownership control and marketability characteristics Valuation date Valuation report date Type of report issued (i.e., a detailed report) Applicable standard of value Applicable premise of value Any assumptions and limiting conditions Any restrictions/limitations on the scope of work or the data availability Any hypothetical conditions assumed Description of any specialist’s work relied on and the level of responsibility the valuation analyst assumes for the specialist’s work Disclosure of any subsequent events Any jurisdictional exception

AICPA Statement on Standards for Valuation ServicesReporting of the Valuation Engagement—The Detailed Report (continued): 

AICPA Statement on Standards for Valuation Services Reporting of the Valuation Engagement— The Detailed Report (continued) The detailed report should also include the following sections: A sources of information description An analysis of the subject entity and related nonfinancial information A financial statement/information analysis A description of valuation approaches and methods considered A description of valuation approaches and methods used A description of valuation adjustments A description of any nonoperating assets and excess assets A signed representation by the valuation analyst The professional qualifications of the valuation analyst A reconciliation of value estimates and a conclusion of value

AICPA Statement on Standards for Valuation ServicesReporting of the Valuation Engagement—The Summary Report: 

AICPA Statement on Standards for Valuation Services Reporting of the Valuation Engagement— The Summary Report Identity of the client Purpose and intended use of the valuation Intended users of the valuation Identity of the subject entity Description of the subject interest Subject interest ownership characteristics and degree of marketability Valuation date Valuation report date Type of report issue (i.e., a summary report) Applicable standard of value Applicable premise of value Sources of information used in the valuation Any assumptions and limiting conditions Any restrictions/limitations on the scope of work or the data availability Any hypothetical conditions assumed Description of any specialist's work relied on and the level of responsibility valuation analyst assumes for specialist’s work Valuation approaches and methods used Reconciliation of value estimates and conclusion of value Disclosure of any subsequent events Any jurisdictional exception Representation of the valuation analyst Signature of valuation analyst or analyst’s firm The summary report provides a summary of the information that would be provided in a detailed report The summary report should include the following:

AICPA Statement on Standards for Valuation ServicesReporting of the Valuation Engagement—The Calculation Report: 

AICPA Statement on Standards for Valuation Services Reporting of the Valuation Engagement— The Calculation Report A calculation report is the only report that should be used to report the results of a calculation engagement The report should state that it is a calculation report The calculation report should identify: Any hypothetical conditions used Any jurisdictional exception Any assumptions and limiting conditions A description of any specialist’s work relied on and the level of responsibility valuation analyst assumes for specialist’s work A disclosure of any subsequent events

AICPA Statement on Standards for Valuation ServicesReporting of the Valuation Engagement—The Calculation Report (continued): 

AICPA Statement on Standards for Valuation Services Reporting of the Valuation Engagement— The Calculation Report (continued) The calculation report should summarize the calculated value, including: Identification of the subject interest Identification of the calculation date Valuation report date Statement that the valuation analyst is not obligated to update the calculation Description of the calculation procedures performed Statement that the calculation was performed in accordance with this Statement Description of the subject interest characteristics, including characteristics of control and marketability A statement that the estimated value is a calculated value A general description of the calculation engagement The calculated value Signature of the valuation analyst or the valuation analyst’s firm

AICPA Statement on Standards for Valuation ServicesReporting of the Valuation Engagement—The Oral Report: 

AICPA Statement on Standards for Valuation Services Reporting of the Valuation Engagement— The Oral Report An oral report may be used in either (1) a valuation engagement or (2) a calculation engagement An oral report should include all information necessary to relate the scope, assumptions, limitations, and results of the engagement The oral report should limit any misunderstanding between the valuation analyst and the oral report recipient The valuation analyst should document the substance of the oral report in the engagement workpapers

AICPA Statement on Standards for Valuation ServicesReporting of the Valuation Engagement—Restrictions on Use of the Valuation Report: 

AICPA Statement on Standards for Valuation Services Reporting of the Valuation Engagement— Restrictions on Use of the Valuation Report The valuation analyst should indicate in the valuation report any restrictions on the use of the report (which may include restrictions on the users of the report, the uses of the report by such users, or both). The valuation analyst is not responsible for controlling a client’s distribution of a valuation report that has been restricted as to use.

AICPA Statement on Standards for Valuation ServicesSSVS Appendices Content and Intent—Appendix A: 

AICPA Statement on Standards for Valuation Services SSVS Appendices Content and Intent— Appendix A Presents an illustrative List of Assumptions and Limiting Conditions Contents Purpose

AICPA Statement on Standards for Valuation ServicesSSVS Appendices Content and Intent—Appendix B: 

AICPA Statement on Standards for Valuation Services SSVS Appendices Content and Intent— Appendix B Presents the International Glossary of Business Valuation Terms Definitions Adopting Organizations

AICPA Statement on Standards for Valuation ServicesSSVS Appendices Content and Intent—Appendix C: 

AICPA Statement on Standards for Valuation Services SSVS Appendices Content and Intent— Appendix C Presents a Glossary of Additional Valuation Terms Definitions Terms specific to the Statement

AICPA Statement on Standards for Valuation ServicesSSVS Appendices Content and Intent—Appendix D: 

AICPA Statement on Standards for Valuation Services SSVS Appendices Content and Intent— Appendix D SSVS Interpretation No. 1 'Scope of Applicable Services' of Statement on Standards for Valuation Services Part of the AICPA continuing efforts at self-regulation of its members engaged in valuation practice Paragraphs 2 and 3 – General interpretation Identifies and reiterates excluded items Paragraphs 6 to 15 – Illustrations relating to litigation engagements and certain controversy proceedings Paragraphs 16 to 71 – Illustrations relating to tax engagements (e.g., paragraph 66 related to transfer pricing studies) Paragraphs 72 to 81 – Illustrations relating to other types of engagements Paragraphs 82 to 89 – Illustrations relating to PFP-specific engagements

AICPA Statement on Standards for Valuation ServicesSummary and Conclusion: 

AICPA Statement on Standards for Valuation Services Summary and Conclusion Purpose, objective, and benefits of the Statement Application of the Statement to all AICPA members who accept engagements to estimate value after January 1, 2008 Summary of valuation engagement analysis requirements the valuation engagement the calculation engagement Summary of valuation engagement reporting requirements the valuation engagement detailed report summary report the calculation engagement the calculation report all engagements the oral report

AICPA Statement on Standards for Valuation ServicesQuestions and Discussion: 

AICPA Statement on Standards for Valuation Services Questions and Discussion Purpose and objective of this presentation On behalf of the AICPA BV committee, we appreciate the opportunity to present the Statement Valuation analysts should also comply with all professional requirements of other valuation organizations of which they are members Concluding remarks Discussion Questions Comments Suggestions