How to Select a Business Valuation Expert

Modern business or startup requires establishing the value of firms or financial instruments like securities and bonds. Usually, such valuation is required for substantial commercial transactions, tax purposes, or both, something you don’t want to skimp on. To ensure a valuation that stands up to legal scrutiny, you need to hire reputable business valuers in Canberra to avoid all the headaches that come with getting grossly incorrect valuation figures.

It’s crucial to remember that the world of business valuation has several sub-niches. Depending on the kind of valuation you need, you’ll have to contact an expert with experience and training in that specific area. Not all business valuation credentials and expertise will fit your specific needs. 

To choose the best business valuation expert for your situation, you need to consider credentials and training. 

Business Valuation Credentials

The education needed to evaluate a business and correctly develop an acceptable valuation is vital. You need to consider where a business evaluation specialist got their accreditation from and its relevance to what you need. For instance, if the valuation credentials of the expert are specific to finance or not. Being a certified business valuation expert isn’t just about acquiring the certificate that says so. It goes beyond the person-hours involved in college study. Experience is key.

The following designations for business valuation experts reflect their training and expertise. Look for those with the following:

1)Certificate Valuation Analyst (CVA)

These credentials are issued by the National Association of Certified Valuators and Analysts (NACVA). It is only open to candidates that have an accounting degree. Such candidates must also be in good standing. Business degree holders can also apply. Before undertaking their written exam, you must apply for NACVA membership. Paying a CVA designation fee can also do the trick. You must have significant experience in the valuation of businesses and other such transactions. For example, the candidate must:

1. demonstrate a sound knowledge of essential business valuation methodologies and practices.
2. have worked in a full-time job for at least two years. This job must have afforded the candidate enough experience in business evaluation.
3. have at least 10 successful valuations under their belt.

After a candidate has met all the above criteria, they must submit a valuation report for peer review. Every three years, even after getting certified, candidates must complete at least 36 hours of continuous education.

2) Accredited Senior Appraiser (ASA)

The American Society of Appraisers issues the ASA; This is considered the highest level of business valuation certification. There is a mandatory 120 hours of education. After this, the candidate will need to pass several exams to ensure a solid grasp of the material; This is in addition to having five years of full-time experience in the business evaluation field. The ASA focuses solely on business valuation. Like CVA, ASA candidates must submit business valuation reports for peer review. Re-accreditation here is every five years, during which the candidate must provide verifiable proof of continuing education and professional growth.

3) Chartered Financial Analyst (CFA)

A charter holder is a term used to refer to those who’ve completed this course of advanced investment analysis extending beyond regular business valuation expertise. The CFA Institute issues the CFA. Passing its three levels of examinations requires at least 900 hours of study. If a candidate can take all these exams consecutively, they can expect to complete all three in at least 18 months. As you go through the education, you must submit professional references indicating at least four years of work experience in business evaluation.

4) Experience

Experience is essential, especially if you need a valuation expert with knowledge in a specific area. After establishing their credentials, look for whether they have the relevant experience. The experience could be in:

1. Portfolio valuation: If you require a valuation of assets, you want an expert with experience and knowledge in portfolio evaluation. Portfolio evaluation uses the market approach and the income approach to value assets.
2. Merger and Acquisitions (M&A) valuation: If you need M&A valuation, you’ll need someone specifically trained and experienced in handling such issues. The market approach is central to this type of valuation. For example, if you plan on purchasing a company, the market approach used in M&A will rely on data about similar companies. Analysis of such data will give a reasonable estimate of the company’s worth, enabling you to make a sound financial decision.

All in all, you shouldn’t hire a business valuation expert without doing your homework. Careful consideration of all the relevant factors will help you make the right decision.

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