Chapter 27

Valuation Views and Controversial Issues: An Illustration

The purpose of this chapter is to highlight and discuss important concepts and views including numerous controversial issues that permeate business valuation. The following case presents selected excerpts from a business valuation report that was originally, in its entirety, in full compliance with the American Institute of Certified Public Accountants Statement on Standards for Valuation Services No. 1 and the Uniform Standards of Professional Appraisal Practice. The excerpts from the report presented here are only to form the structure to present various topics. As presented, it is not a detailed or comprehensive valuation report and should be viewed only as a teaching tool to present the various issues. Several sections of the report were purposely eliminated or truncated. At various points throughout the modified report we will stop and present Valuation Views (VV) that explain various concepts, as well as controversial issues.

This report format is one of many that analysts can use in presenting business valuations. All schedules have been omitted as they are not necessary for explaining the VVs. Some of the terms, numbers, sources and other data have been changed for ease of presentation. Furthermore, the initial view presented may not always be the best view in a particular valuation.


Mr. Tom Profit LEGGO Construction, Inc. 123 Builders Drive Anycity, Anystate 54321

Dear Mr. Profit:

The objective ...

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