Our ongoing survey on proposed “united” BV standards has set a record for number of responses received—sixty-five, so far. The high level of passion and commitment to the BV profession also comes with some hyperbole. “If the major BV organizations do not end their petty bickering,” says one respondent, “we are all going to end up puppets dancing on the strings of a bunch of regulators who do not have a clue what is required in the BV arena.” Separate standards “pit professional versus professional,” says another, and can make appraisers subject to “unwarranted attacks” from attorneys, regulators, and their peers. “This is ridiculous!” agrees another. “We need to get one set of NATIONAL standards and quit competing with each other.”
One respondent points out the costly pitfalls of non-consensus, alleging that a Massachusetts business appraiser recently faced malpractice claims for failing to comply with USPAP. His defense: He’s not an ASA (the only organization to require USPAP compliance). An attorney specializing in complex matrimonial cases agrees. “The diversity of and disparity among BV standards…provide fertile ground for cross-examination,” he says. “Many business appraisers try to assert compliance with all the standards, not realizing the important differences among them. This can be a fatal mistake when facing a competent attorney who understands BV.”
Is the problem truly intractable? “You’ve already sort of lost that battle,” says one commentator. “The solution is to respond with current, useful education and guidance, not to grasp at controlling the ‘standard’ definitional power strings.” “Further,” adds Jim Alerding (Clifton Gunderson, LLP), “those who believe that having the BV community agree upon a single standard will solve the problem and make the FASB go away are living in Fantasy Land.” Now that the survey has successfully aired the problem—perhaps the focus should be on potential, “real world” solutions. Email your suggestions to the editor. And do look for all survey comments to appear in the next (November 2007) Business Valuation Update™.
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