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The Scope of the Appraisal

ASA Business Valuation Standards identify three possible scopes for appraisal work.

Appraisal

The objective of an appraisal is to express an unambiguous opinion as to the value of the business, business interest, or security.

  • Based on all relevant information available to the appraiser as of the appraisal date
  • Appraiser conducts appropriate procedures to collect and analyze all information expected relevant to valuation
  • Valuation considers all approaches deemed relevant by appraiser

Appraisals are required for Employee Stock Option Plans (ESOPs), tax, financing, and litigation purposes. With an appraisal, clients engage Ceres as an independent appraiser to provide an opinion of value.

Limited Appraisal

The objective of a limited appraisal is to express an estimate as to the value of the business, business interest, or security. Development excludes some procedures required of an appraisal.

  • Based on limited relevant information available to the appraiser as of the appraisal date
  • Appraiser conducts only limited procedures to collect and analyze information considered necessary to support conclusion presented
  • Valuation based on approaches deemed most appropriate by appraiser

A limited appraisal is often used to support strategic decision making around buying or selling a business. With a limited appraisal, clients engage Ceres as a valuation consultant.

Calculation

A calculation may be based on consideration of only limited relevant information and the appraiser performs limited information analysis and procedures. It may be based on approaches agreed on with the client. A calculation is used for early strategic planning. With a calculation, clients engage Ceres as a valuation consultant.