Business Valuation

The Barson Group has two main areas of focus, and they are often interconnected. Elsewhere on this website we go into detail about the forensic or investigative accounting functions as they pertain to various forms of litigation. The other main focus of our practice is Business Valuations. Many times, business valuation is part and parcel with the typically preceding step of forensic accounting. It is common, especially in litigation work that, before we can proceed with the business valuation, we need to first perform various financial analytical steps that are typically called investigative or forensic accounting – which puts us in the position of having financial data upon which we can rely in order to then proceed with the business valuation.

Divorce or Commercial Litigation – where parties involved have an interest in a business. In the non-litigation arena, we are often asked to do a business valuation for purposes of the Gifting of an interest in a business, or, for an Estate where someone has died owning an interest in (sometimes the entirety of) a business. Business valuations are also needed at times for purposes of a Buy/Sell or Shareholder (or Partner) Agreement, and sometimes for various tax and financial planning purposes.

As referenced elsewhere on this website, our experience as to valuing businesses (or interests therein) is rather substantial and varied. We have handled perhaps in excess of 1,000 business valuations – with values ranging from effectively near or at zero, up to the hundreds of millions of dollars. These valuations have encompassed a wide swath of types of businesses – including manufacturing, wholesale, distribution, professional services, construction, service entities of various kinds, retail, etc. They have included businesses with just one location in New Jersey, as well as others with multiple locations in multiple states and even internationally. We have an excellent success rate at trial (where our valuations were for litigation matters), as well as before the IRS (where the valuation involved gifting or estates).

As of course you would expect, our valuations comply with our profession’s standards, in particular those promulgated by the American Institute of CPAs. Those standards are detailed in the Statement on Standards for Valuation Services (SSVS). Consistent with those standards, and to meet our client base’s varied needs, we regularly perform valuations both in the full blown sense (what might also be called the full scope, or similar such language – which under SSVS is called a “conclusion of value”); as well as the shortcutted or limited scope valuation (which is called a “calculation of value” under SSVS). Typically, the full bore conclusion of value is called for, is required, in litigation matters, and where a report has to be submitted to the IRS, such as for gifting and estates. The limited scope calculation of value is often a satisfactory alternative (and one which typically can be significantly less costly than the conclusion of value) where finances are greatly restricted, the matter is not in litigation or it’s understood that the valuation will not (in the vast majority of cases) be allowed to be used in a trial. It is also often suitable for mediation or collaborative law situations.