An Opinion of a Businesses Value is a process incorporating a set of procedures used to determine the economic value of an owner’s interest in a specific business. Opinions of Value are often used to estimate the selling price of a business, resolve disputes related to estate and gift taxation, divorce litigation, allocate business purchase price among the business assets, establish a formula for estimating the value of partners´ ownership interest for buy-sell agreements, and many other business, legal and taxation matters.

Before the appraisal of business value can be measured, the assignment must specify the reason for and circumstances surrounding the business appraisal. These are formally known as the business appraisal standards and the premise of value.

Business Value Appraisal results can vary considerably depending upon the choice of both the standard and premise of value. For example, a business buyer and seller may negotiate to establish the value of business assets that approaches the fair market value standard. However, the value conclusions based on the going concern premise and that of assemblage of business assets may be quite different. One reason is that an operating business creates value by means of its ability to coordinate its capital, human and management resources to produce economic income. The same set of assets not currently used to produce income is generally worth less.

"Fair Market Value" (FMV), a central standard of measuring business value, is defined as the price at which property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts. The ´fair market value´ standard incorporates certain assumptions, including the assumptions that the hypothetical purchaser is reasonably prudent and rational but is not motivated by any synergistic or strategic influences; that the business will continue as a going concern and not be liquidated; that the hypothetical transaction will be conducted in cash or equivalents; and that the parties are willing and able to consummate the transaction.

These assumptions might not, and probably do not, reflect the actual conditions of a particular market in which the subject business might be sold, however, these conditions are assumed because they yield a uniform standard of value, after applying generally-accepted appraisal techniques, which allows meaningful comparison between businesses which are similarly situated.

For these reasons Business Value Appraisal Opinions are a range concept which can be quite subjective and rely on the skill, market knowledge and technical competency of the Appraiser to produce a meaningful report based on the presented data and circumstances.

Avantia Corporate Services Business Appraisers are highly skilled in producing Business Appraisals to the internationally recognised Universal Standard for Professional Appraisal Practice (USPAP) standard.

As a Chartered Accountant remarked when referring his Client to  Avantia "We consider the Process, Risk Assessement and Average Earnings Multiplier determination was professionally undertaken and had regard to our purpose. ........... The final presentation answered our questions and we are confident the valuation documentation will provide a clear and informative guide to those using it". (letter on file)

Bound Appraisal Reports outlining Scope and Methodologies used incorporate Certification by the Appraiser and can be supported by Court testimony if required.

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