Some of the major elements required in the statements on standards
for valuation services (SSVS) include:
• Professional Competence: A valuation analyst should possess a
level of knowledge of valuation principles and theory and a level
of skill in the application of such principles that will enable him
or her to identify, gather, and analyze data, consider and apply
appropriate valuation approaches and methods, and use
professional judgement in developing the estimate of value
(AICPA, 2007).
• Ownership Information: The valuation analyst should obtain,
where applicable and available, ownership information
regarding the subject interest to enable him or her to determine
the type of ownership interest being valued and ascertain
whether that interest exhibits control characteristics (AICPA,
2007).
• Valuation Approaches and Methods: Valuation analyst should
consider the three most common valuation approaches: Income
approach, Asset Approach, and the Market Approach (AICPA,
2007). Within each approach, there are several commonly
accepted methods that the valuator may choose to employ
when valuating a business.
The AICPA issued this Statement on Standards of Valuation Services
(SSVS) with the goal of improving the consistency and quality of
practice among AICPA members performing business valuations. The
increased importance of intangible assets in businesses, and the
related movement toward the reporting of business assets at fair
value is what ultimately forced the AICPA to issue the SSVS
(Liberman, 2008).
In comparing the structure of the SSVS and other standards, they all
include the rules for the development of a business appraisal
followed by rules for the written appraisal report (Liberman, 2008).
References:
AICPA.org. (2007, June). Statement on standards for valuation services
(VS Section 100). AICPA.org. Retrieved from
https://www.aicpa.org/resources/download/statement-on-
standards-for-valuation-services-vs-section-100
