FAQs

DeLisi & Ghee is happy to answer any questions you may have about business appraisals. Here are some frequently asked questions and answers:

Why do I need to have my business appraised?
There are many reasons for appraisals: estate and gift tax matters, mergers and acquisitions, litigation, and business planning are some of the many uses. A properly documented and prepared report can help you avoid costly consequences. If you're concerned with over-paying estate taxes, being able to defend the proper value of a business or estate in a litigation proceeding, or selling your business for less than its worth, you need a business valuation specialist.

What standards exist for business appraiser?
While there are no licensing requirements for business appraisers, the Congress of the United States created the Uniform Standards of Professional Appraisal Practice (USPAP) that encompasses the business appraisal profession. In addition, Revenue Ruling 59-60, developed by the IRS, is a set of parameters defining the appraisal process for tax matters. At DeLisi & Ghee, our reports adhere to all Federal Standards, IRS Standards, and the detailed standards mandated by The Institute of Business Appraisers and American Society of Appraisers.

Can a "ball park" estimate of value be determined by looking at the numbers?
The process of valuing a business is more complex than just number-crunching. Every business has risk and value drivers that must be determined. This requires research, analysis and experience. The entire process can take on average from 30 to 60 hours or more to complete. Every valuation is customized to the client's needs and scope of service. There are no shortcuts, only sound analysis and adherence to generally accepted appraisal methods in order to render a defensible opinion of value.

Can a formula be determined for the valuation of a business?
Formulas do not exist in the valuation of a closely held business. While there are "rules of thumb" available to the appraiser, each business is unique in terms of profits, growth, future outlook, risk, management, and many other factors. In addition, values change over time. They are dynamic. A formula that could work today, for example in a buy-sell agreement, may produce a totally incorrect value when fair market value is needed most. This is why an appraiser is hired to determine the influences of the market as of the valuation date.