Credentials are important – They imply that an appraiser possesses a level of expertise and competence in the business valuation profession. Credentials establish minimum training and experience requirements, professional and ethical standards, and require the completion of mandatory continuing professional education (“CPE”) courses. Credentials set a standard to which all certified appraisers adhere to in order to preserve the trust of the public and are intended to assure that all credentialed appraisers maintain a requisite body of knowledge and apply methodologies consistently throughout a professional organization.
Often, when prospective clients are considering hiring a business valuation expert, credentials are the differentiating factor that a client bases their selection upon. Credentials play a vital role in an appraiser’s Curriculum Vitae and add credibility to opinions rendered by that expert. Business valuations are often challenged by shareholders, partnerships, estates, the Internal Revenue Service, etc. In such cases where a qualified, independent third party appraiser is needed to assist in resolving disputes, one of the first questions asked by the client/attorney should be whether that appraiser is credentialed in business valuation.
There are several accrediting organizations and the appraisal designations that members in the business valuation profession can obtain. Distinguishing one credential from another can be tricky. Therefore to assist in decoding the “alphabet soup,” we have endeavored to highlight the primary differences between some of the more common business valuation credentials below.
The Accredited Senior Appraiser (“ASA”)
The ASA designation is offered through the American Society of Appraisers and is recognized as the oldest and largest appraisal accreditation organization. The ASA is recognized as the most prominent business valuation credential based on the rigorous requirements to obtain it. The ASA designation has the most requirements out of all of the appraisal accreditations.
- Education Requirements: Candidates must have a 4-year college degree or its equivalent; must complete 4 Principles of Valuation courses and successfully pass an exam upon completion of each level. Candidates must also pass an ethics exam and The Uniform Standards of Professional Appraisal Practice (“USPAP”) course. USPAP is the generally recognized ethical and performance standards for the appraisal profession in the United States adopted by Congress in 1989.” http://www.appraisalfoundation.org/
- Experience Requirements: Candidates of the ASA designation must have 10,000 hours (min of 5 years) of full-time business valuation appraisal experience.
- Continuing Education Requirements: Credentialed ASA’s are required to complete 100 hours of CPE every 5 years.
The Accredited in Business Valuation (“ABV”) designation is granted through the American Institute of Certified Public Accountants.
The ABV designation is available to certified public accountants (“CPA”) and is highly sought after because having this credential implies that a practitioner possesses expertise in business valuation in addition to accountancy.
- Education Requirements: Candidates must at a minimum possess a CPA designation, bachelor’s degree, and have passed an 8 hour exam.
- Experience Requirements: Candidates of the ABV must accrue 150 hours of business valuation experience (involving at least 10 business valuation assignments).
- Continuing Education Requirements: Credentialed ABV’s are required to complete 120 hours of CPE every 3 years.
The Certified Business Appraiser (“CBA”) certification is granted through the Institute of Business Appraisers.
The CBA designation is the Institute’s second most prestigious professional designation, following the ASA, and “denotes a level of competence attained only by the most accomplished business appraisers.”
- Education Requirements: Candidates must possess a 4-year college degree, must complete 90 hours of classroom education and pass the final exam.
- Experience Requirements: Candidates are required to complete 10,000 hours (5 years) of experience or 90 hours of classroom education time and submit two demonstrative reports.
- Continuing Education Requirements: Credentialed CBA’s are required to complete 24 hours of CPE every 2 years.
The Certified Valuation Analyst (“CVA”) designation is granted through the National Association of Certified Valuation Analysts.
The CVA association is the largest (measured by credentialed members) standing organization of Business Valuation professionals.
- Education Requirements: Candidates must have a 4-year college degree and pass a two-part exam.
- Experience Requirements: In order to obtain the CVA designation, a candidate is required to complete a foundational training course and successfully pass a two part exam. No set requirement for hours of experience.
- Continuing Education Requirements: 60 hours of CPE every three years.
If you are considering the selection of a business appraiser, Evergreen Advisors’ credentialed experts would be happy to discuss your needs and provide assistance in assuring you choose the correct appraiser for your assignment.
About our Business Valuation Team: With backgrounds in law, accounting and finance, members of the Business Valuation Practice Group of Evergreen Advisors can offer you reliable business valuation advice and well-reasoned opinions. Our findings are supported by the most recent industry and economic research, the latest in valuation methodologies, and actual transaction experience. We can assist you with a wide range of business valuation expertise in connection with Federal estate and gift tax issues, Fair Value financial reporting, equity incentive plans, litigation support, fairness and solvency opinions, and transaction support. Our professionals are experienced in a wide range of industries and have the capability to assist you with your business valuation needs.
For more information about Evergreen Advisors’ business valuation services, please contact us 410.997.6000
About Evergreen Advisors
Evergreen Advisors is a boutique middle market investment bank and corporate advisory firm focused on servicing organizations throughout their financial lifecycles to drive successful outcomes. Serving the Mid-Atlantic region including Maryland, Washington D.C., Virginia, and Pennsylvania, Evergreen Advisors, was formed in 2001 to provide innovative and strategic solutions to meet our clients’ evolving business needs.