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What do you need an Appraisal or a Valuation

So what is the difference?

The Appraisal produces the figures, capitalisation rate and multiplier of the adjusted EBIT, with return on investment based on the ‘Worth’ of the business. We use your tax figures, have a lengthy discussion with you and carry out an inspection of the business we look at the market you are in and a number of other areas to determine the risk factors. But here, we do not supply supporting documentation. A written report can be provided. An appraisal can be delivered in a few days.

The Valuation can be based on a variety of criteria. It may depend on the scope of the engagement, what are the instructions what the Valuation is required for and for what period.

The paperwork required is the same for the Appraisal however there may a requirement for much more supporting documentation. Investigations are made into many of the areas to determine viability and risk.

Depending on the scope / instructions, the Valuation may need to be supported with documentation and be defensible.

The Valuation depending on scope / instructions, size of the business and all the factors that can go into a business operation can take from a week to several weeks.

The cost of a Valuation can vary greatly, depending on the scope / instructions requirement for defensibility and or the use required for the Valuation. Special valuations on equipment, opinions required, investigations, etc all take time and money.

The full Valuation of a business can be a very complicated process that may include analysis of 200-500 variables and requires expertise in business operation and up-to-the-minute knowledge of the business marketplace.

Discussion with an AIBB Registered Business Valuer, will assist you in determining what exactly you may require.

When most people talk about a Business Valuation, they are only looking for the results from a Appraisal.

An Appraisal done by a Business Valuer, will give you much the same sort of results as a full valuation, however it will not have the supporting documentation or will it be defencible in a court room. Appraisals really only look at the current situation with some consideration of observable risk factors.