• International Valuation Standards (IVS): The IVS ensures consistency across global valuations through three primary methodologies: the market approach, the income approach (including discounted cash flow (DCF)), and the cost approach.
• Uniform Standards of Professional Appraisal Practice (USPAP): USPAP outlines ethical and performance standards for valuations in the U.S., ensuring that certified business valuation reports are audit-ready and legally compliant. According to USPAP, all methods should be considered, and firms must provide justifications for the chosen methodology in the final report.
• Revenue Ruling 59-60: As the IRS’s cornerstone guideline for 409A valuation services, gift tax, and estate tax valuations, this ruling addresses essential elements such as net tangible assets, goodwill impairment, earnings capacity, and market comparisons. Compliance with this ruling builds trust with the IRS.
• ASC 718 and ASC 820: These standards are crucial for stock option valuations and ensure proper financial reporting for employee stock compensation. Following these standards builds confidence among auditors and investors.
• Required Certifications and Report Standards: The U.S. valuation ecosystem requires valuation professionals to hold recognized certifications such as ASA (Accredited Senior Appraiser), ABV (Accredited in Business Valuation), and CVA (Certified Valuation Analyst). These certifications ensure that valuation reports are credible, compliant with IRS regulations, and accepted by auditors, investors, and regulatory bodies. Additionally, the valuer’s signature on the report is essential for establishing authenticity and accountability. Valuation reports must follow standardized formats and include all necessary disclosures to ensure they meet stakeholder expectations and regulatory requirements.

An IRS-certified valuer is a professional who possesses the necessary qualifications, certifications, and experience recognized by the Internal Revenue Service (IRS) to conduct valuations for tax purposes. Such valuers must adhere to IRS Revenue Ruling 59-60, which outlines the principles for valuing closely held businesses, ensuring that valuations withstand IRS scrutiny and meet federal tax requirements.

A well-structured valuation report includes critical components such as a transmittal letter, outlining the scope of the valuation, the purpose and intended use, standard of value, and the premise and level of value. It also covers the valuation date, special circumstances, valuation procedures, financial analysis, industry and SWOT analysis, and details on selected and excluded methodologies. The report concludes with sections on valuation discounts/premia, a valuation conclusion, assumptions and limiting conditions, and an appraisal certification. These elements ensure the report is comprehensive, audit-ready, and capable of withstanding IRS scrutiny, building trust with all stakeholders.