27 Apr
What is a business appraisal review?
Posted in General valuation topics, Valuation dictionary on 27.04.10
I recently earned the ABAR (Accredited for Business Appraisal Review) designation from the Institute of Business Appraisers. The ABAR process is not a valuation, but a review of the valuation process. The resulting business appraisal review opinion states whether the valuation report is credible.
The valuation process is based on a body of knowledge and generally accepted appraisal practices. The appraiser applies his or her informed judgment, based on the facts and circumstances related to the business to arrive at an opinion or conclusion of value. The appraiser then documents the relevant information and explanations, supporting his or her conclusions in a valuation (or appraisal) report.
The business appraisal review process examines the credibility of the valuation work product, looking at the information in the report and the methodologies used. If a report fails to disclose sufficient information, has analytical gaps or misapplies methodology, it may be found to lack credibility.
There are three types of review opinions: a finding of concurrence, a finding of non-concurrence and a finding of no opinion. A finding of concurrence indicates that the report is credible. When there is insufficient information for the reviewer to issue a review opinion, a finding of no opinion will be issued.
A business appraisal review is not an opinion regarding the value of a business. It cannot take the place of a full appraisal as a second opinion.
If you have questions regarding when a business appraisal review is needed, you can post or question or email me.
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