Introducing Ssvs No. 1, the New Aicpa Business Valuation Standard

Summary

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Statement on Standards for Valuation Services No. 1 (SSVS No. 1), Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset, has been issued by the AICPA Consulting Services Executive Committee. SSVS No. 1 applies when any AICPA member is engaged to estimate the value of a business, business ownership interest, security, or intangible asset when that member applies valuation approaches and valuation methods and uses professional judgment as an essential component of estimating value. SSVS No. 1 describes two types of engagements: a valuation engagement and a calculation engagement. In any valuation engagement, SSVS No. 1 indicates that the minimum information that the member needs to analyze the subject interest depends on the nature of the subject interest, the scope of the engagement, the valuation date, the intended use of the valuation, the applicable standard of value, the applicable premise of value, the assumptions and limiting conditions, and any applicable government regulations or other professional standards. The valuation analyst should use all valuation approaches and methods that are appropriate to the engagement.

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Introducing Ssvs No. 1, the New Aicpa Business Valuation Standard

The long-awaited Statement on Standards for Valuation Services No. 1 (SSVS No. 1), Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset, (AICPA, Professional Standards, vol. 2, VS sec. 100) has been issued by the AICPA Consulting Services Executive Committee (CSEC). SSVS No. 1 is effective for business valuation (BV) engagements accepted by members after January 1, 2007. Of course, earlier adoption of SSVS No. 1 is encouraged. The result of many years of discussion and development, SSVS No. 1 will benefit all AICPA members and their valuation clients, as well as...

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