Business Valuation Frequently Asked Questions
What business decisions can a valuation support?
Common uses include mergers and acquisitions, joint ventures, other complex business arrangements, transaction planning and modeling, regulatory compliance, financial reporting, tax planning, and disputes or litigation. The analysis should be developed around the decision the valuation is intended to support.
How does valuation support mergers, acquisitions, and joint ventures?
Valuation analysis can support negotiation, transaction structuring, purchase price allocation, and strategic decision-making. It may also be used to assess value in other complex business arrangements.
When is valuation work used for financial reporting?
Purchase price allocations and goodwill impairment testing are financial reporting-related valuation services. These assignments require defensible methodologies and must meet the standards applicable to the reporting purpose.
How can valuation analysis support a dispute or litigation matter?
Valuation analysis may address economic damages and other value-related issues in litigation and disputes. Objective analysis, clear documentation, and rigorous methodology help the conclusions withstand review by courts, regulators, and other stakeholders.
Why should a business valuation reflect the company and its industry?
Business valuation requires a clear understanding of the company, its industry, the purpose of the valuation, and the decision the analysis must support. That context informs which assumptions and factors need to be evaluated rather than treating valuation as a technical calculation alone.
