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Determination of Value: Guidance on Developing and Supporting a Credible Opinions

Book Description

How to develop and support a credible opinion of value based on a foundational framework

This book provides knowledge and guidance to valuation practitioners on achieving a new level of professionalism and credibility, as well as to those stakeholders in the valuation process in need of assessing the credibility of an appraiser's work product for decision-making purposes. It introduces a well defined framework of key credibility concepts and procedures at each step of the appraisal process, including reasonableness tests, valuation methodologies, financial analysis, economic and industry analysis, engagement planning, and informed judgment.

  • Provides needed guidance to valuation practitioners to enhance their valuation practice and improve the credibility of the appraiser's work product

  • Offers guidance to stakeholders in the valuation process in need of assessing the credibility of an appraiser's work product for decision-making purposes

  • Get foundational framework appraisal advice with the proven guidance found in Determination of Value.

    Table of Contents

    1. Cover
    2. Series
    3. Title Page
    4. Copyright
    5. Dedication
    6. Preface
    7. Acknowledgments
    8. Chapter One: The Problem
      1. IN SEARCH OF A TRUTH
      2. THE ASSURANCE EXPERT
      3. CREDIBILITY IS NOT SYNONYMOUS WITH TRUTH
      4. WHERE DO WE GO FROM HERE?
    9. Chapter Two: The Solution
      1. TOWARD A DEFINITION OF CREDIBILITY
      2. THE ATTRIBUTES THAT MAKE YOU CREDIBLE
      3. OPERATIONAL CREDIBILITY ATTRIBUTES
      4. PERSONAL CREDIBILITY ATTRIBUTES
      5. GENERAL OBSERVATIONS ABOUT “CREDIBILITY”
      6. CREDIBILITY IS NOT SYNONYMOUS WITH TRUTH
      7. DON’T CONFUSE OPINING WITH DECISION MAKING
      8. BEWARE OF BLACK BOX OPINIONS
      9. CONCLUSION
      10. NOTES
    10. Chapter Three: The Credibility Pyramid and the Importance of a Well-Defined Analytical Process
      1. THE IMPORTANCE OF PROCESS
      2. THE VALUATION PROCESS
      3. THE CREDIBILITY PYRAMID
      4. THREE PROBLEM-SOLVING PHASES
      5. CONCLUSION
    11. Chapter Four: Pyramids, Not Castles
      1. WHY IS CREDIBILITY IMPORTANT?
      2. REASONABLE ASSURANCE
      3. GENERALLY ACCEPTED PRACTICES
      4. GENERALLY ACCEPTED PRACTICES LEAD TO UNIFORMITY AND PROFESSIONAL CONSENSUS
      5. ANALYTICAL GAPS
      6. INFORMED JUDGMENT
      7. CONCLUSION
      8. NOTES
    12. Chapter Five: Climbing the Credibility Pyramid
      1. THE IMPORTANCE OF REVENUE RULING 59–60
      2. IDENTIFICATION OF KEY PRE-ENGAGEMENT PARAMETERS
      3. PLANNING TO ACQUIRE KNOWLEDGE ABOUT THE SUBJECT
      4. GENERAL PLANNING CONSIDERATIONS
      5. THE IMPORTANCE OF THE STANDARD OF VALUE AS YOU CLIMB THE PYRAMID
      6. SELF-ASSESSMENT TOOLS
      7. STEPPED READING
      8. CONCLUSION
      9. NOTES
    13. Chapter Six: How to Develop and Report Your Opinion
      1. PRACTICE PRESENTING YOUR WRITTEN FINDINGS ORALLY
      2. VALUATION ADJUSTMENTS
      3. DESCRIPTION OF A BENCHMARKING METHODOLOGY USED BY VALUATION ANALYSTS
      4. BENCHMARKING: RELATIVE WEIGHTS AND QUALITATIVE ANALYSIS
      5. MAKE SURE THERE ARE NO ANALYTICAL GAPS IN THE DEVELOPMENT AND DERIVATION OF GROWTH RATES
      6. INCORPORATING PROSPECTIVE INFORMATION THAT IS PRESENTED INTO YOUR OPINED RESULTS
      7. REPORTING YOUR OPINED RESULTS
      8. CONCLUSION
      9. NOTES
    14. Chapter Seven: Reasonableness Tests
      1. DETERMINING REASONABLENESS
      2. EXAMPLE 1: DERIVED ESTIMATE OF VALUE
      3. EXAMPLE 2: GUIDELINE COMPANY METHOD
      4. EXAMPLE 3: USE OF MARKET MULTIPLES
      5. EXAMPLE 4: FEDERAL TAX COMPLIANCE
      6. CONCLUSION
      7. NOTES
    15. Chapter Eight: Enhancing the Integrity of Your Opinion
      1. UNDERSTANDING THE CREDIBILITY THRESHOLD
      2. UNDERSTANDING THE SCOPE UNDERTAKEN
      3. UNDERSTANDING ANALYTICAL RESPONSIBILITIES AND THE IMPACT OF MATTER/CAUSE/EFFECT ANALYSIS
      4. CONDUCT YOUR ANALYSIS WITHIN THE PARAMETERS OF THE ECONOMIC REALITY RELEVANT TO THE FACTS AND CIRCUMSTANCES
      5. MAINTAIN A HIGH LEVEL OF PROFESSIONAL SKEPTICISM AND ENGAGEMENT AWARENESS
      6. REVIEW YOUR ANALYTICAL PROCESS FOR RELEVANCE AND TYPICAL COMMON ERRORS
      7. BE READY TO RESPOND TO ETHICAL CHALLENGES
      8. ENHANCING THE INTEGRITY OF YOUR OPINION WHEN AT TRIAL OR IN HEARINGS
      9. ENHANCING THE INTEGRITY OF YOUR OPINION WHEN AT DEPOSITION
      10. CONCLUSION
      11. NOTES
    16. Chapter Nine: Reviewing the Work of Others
      1. REVIEW ENGAGEMENT PROCEDURES TO CONSIDER
      2. PREPARING A DOCUMENT REQUEST FOR A REVIEW ENGAGEMENT
      3. THE ROLE TO BE ASSUMED: REVIEWING EXPERT OR REVIEWING CONSULTANT
      4. LIMITING CONDITIONS AND ASSUMPTIONS
      5. DETERMINING AN APPROPRIATE SCOPE FOR YOUR REVIEW
      6. MINIMUM SCOPE CONSIDERATIONS IN A REVIEW ENGAGEMENT
      7. CONCLUSION OF A BUSINESS APPRAISAL REVIEW ENGAGEMENT
      8. BUSINESS APPRAISAL REVIEW OPINION
      9. REVIEWER’S INDEPENDENCE
      10. COMMON ERRORS AND ANALYTICAL GAPS FOUND IN VALUATION REPORTS
      11. CONCLUSION
      12. NOTE
    17. Chapter Ten: The Journey Continues
      1. DEFINITION OF CREDIBILITY
      2. ATTRIBUTES ATTACHED TO A CREDIBLE OPINION
      3. SEPARATING DECISION MAKING FROM OPINING
      4. A NOTE ON GENERALLY ACCEPTED PRINCIPLES AND PRACTICES
      5. A DEFINITION OF THE CONCEPT OF INFORMED JUDGMENT
      6. SUGGESTIONS FOR ASSESSING YOUR OWN METHODOLOGY—THE IMPORTANCE OF REASONABLENESS TESTS
      7. SUGGESTIONS FOR ENHANCING THE INTEGRITY OF YOUR OPINION
      8. CONCLUSION
    18. Appendix: Sample Valuation Service Agreement for a CPA Analyst
    19. About the Author
    20. Index