Valuation Credential Certification – How many letters are in the alphabet?

By: Donald J. Schaffer, CPA/ABV, CVA

I apologize in advance for the numerous acronyms that follow. Unfortunately, they are the only shorthand available for some organizations with rather long names. But what do all these letters that you find strung together after the name of a supposed valuation expert mean?

There are many organizations that issue credentials for valuation specialists. The largest of these are the National Association of Certified Valuation Analysts (NACVA), the American Institute of Certified Public Accountants (AICPA), the American Society of Appraisers (ASA), and the Institute of Business Appraisers (IBA), each of which require a substantial commitment to education, testing and experience. There are dozens of other organizations that also issue credentials whose value cannot be readily determined. Some require nothing more than the payment of the requisite fee. With this veritable alphabet soup of credentials out there, how can you determine the qualifications of a valuation professional?

The National Association of Certified Valuation Analysts decided to risk its reputation by submitting itself for certification to the National Organization for Competency Assurance (NOCA). After a process of more than three and one half years that required extensive documentation of every facet of the certification program, NOCA has, through its National Commission for Certifying Agencies (NCCA) division, accredited NACVA’s two premier credentials, Certified Valuation Analyst (CVA) and Accredited Valuation Analyst (AVA).

The CVA credential, for which only CPA’s are eligible, and the AVA credential, for which other business school graduates may qualify, are issued only to candidates who have qualified by education, rigorous examination, and experience. Holders are required to maintain their skills through continuing education. NACVA offers an extensive menu of basic and advanced educational offerings, research, and library services to members.

When picking a valuation professional, carefully weigh not only the credentials, but the organization that issued the credentials. Then evaluate the experience of the professional in doing the type of project that you require. Then check references. Be sure you fully understand the quality and depth of the analysis to be performed when discussing pricing of the engagement. Poor quality valuation work, especially in tax, divorce, and business ownership matters that may lead to examination or litigation can have severe consequences.

Donald J. Schaffer, CPA/ABV, CVA heads the Business Valuation practice at CJBS, LLC. He began specializing in business valuations and first testified as an expert at trial in 1983. He was awarded a Certificate of Educational Achievement in Business Valuation in 1994 by the Illinois CPA Society, earned his CVA credential from NACVA in 1995, and was one of the first seven CPA’s in Illinois to be Accredited in Business Valuation by the AICPA

Contact Don at numbersman@CJBS.com.

MARKET CRASH OFFERS ESTATE PLANNING OPPORTUNITY

By: Donald J. Schaffer, CPA/ABV, CVA

The stock market is down by more than a third, the real estate market has given up years of gains, your business is off from prior years’ performance, and the economic outlook is decidedly gloomy. But there is a silver lining for those whose estates are larger than the current Estate Tax exemption level of $3.5 million.

Now is a great time to think about wealth transfers to the younger generation. By combining depressed asset values with other Estate Planning techniques you may be able to transfer wealth at bargain basement prices, saving Estate Taxes that begin at a rate of 45% on each dollar over the exemption. Transferring minority interests in a business, commercial real estate, or family investment entity right now to insure continuity and train the next generation makes sound business sense. And it may also result in valuation discounts averaging from 10% to as high as 40% of today’s already depressed market value.

Don Schaffer is a CPA and member of the CJBS Business Valuation, Systems Consulting and Tax Practices team. Don works with numerous Estate Attorneys in developing tax saving plans for high net worth individuals and businesses. He also provides litigation support in the areas of valuation and investigative accounting for business disputes and marital dissolution cases.

Contact Don at numbersman@CJBS.com.