Calculation of Value
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 valuable tool for business owners or professionals. Typical uses are as follows:
- Assisting an owner or intermediary to establish an initial asking price for the potential sale of a business
- Estate planning
- Business planning
- Developing a “preliminary” value for litigation matters
- Any matter where an “initial” or “calculation” of value is acceptable
