Just like the character in the hit drama series, some good appraisers are going “bad” by doing calculation engagements—dubbed “valuation meth” by Michael Paschall (Banister Financial Inc.) in a new article. Business appraisers have built a profession on the obligation to provide a reliable and unbiased opinion of value, he notes. “Unfortunately, the increasing use of calculation engagements seriously compromises these historical standards of reliability and independence,” he says.

Just say no: In the article, Paschall examines the definition of a calculation engagement and then outlines the numerous problems with this “synthetic and harmful narcotic.” It’s easy to become “addicted” because calculations are easier to make and are much more profitable than a real valuation, he says. But one of the real dangers is that calculation engagements are being offered in contexts (litigation, estate planning, etc.) for which they were never intended, confusing their users (clients, judges, etc.) who often have no clue about the significant differences between the two and may wind up relying on the unreliable and potentially biased value in the calculation engagement.

There are other dangers to the “highly addictive” calculation engagement, and Paschall lays them out in the upcoming (July) issue of Business Valuation Update.