Constantly evolving, business valuation standards and guidance come from a variety of sources. During a recent webinar, veteran valuation expert Jim Alerding (Alerding Consulting), who has been involved in the development of some of the key standards, gave a review and update, which included these important developments:

• The AICPA has put out a Subsequent Events Toolkit that gives guidance on making disclosures about events occurring after a valuation date that impact the valuation, which is particularly useful now as valuations deal with the pandemic;
• The Appraisal Foundation has issued a series of four valuation advisories for financial reporting (relevant in other areas as well); the latest one is on contingent consideration, and two new ones are in the works (one on company-specific risk and another on discount rates for intangibles);
• The AICPA has issued a Statement on Standards for Forensic Services No. 1 (SSFS 1) designed to provide more tailored authoritative guidance to CPAs who perform forensic accounting services;
• Several valuation groups have collaborated on a proposed revision to the International Business Valuation Glossary, which has triggered some concerns among valuation experts; and
• A relatively new credential, the Certified in Entity and Intangible Valuations (CEIV), has a set of documents known as the Mandatory Performance Framework (MPF) that CEIV holders must follow for fair value measurements but that others should use as best practices (there’s also a Certified in the Valuation of Financial Instruments (CVFI) credential that has its own MPF).

Alerding covered a lot more in his 100-minute webinar, which is available if you click here (purchase required for nonsubscribers).

Extra: During this time of uncertainty, a good paper to read is “Dealing With Valuation Uncertainty at Times of Market Unrest,” by Alexander Aronsohn, who is the technical standards director at the International Valuation Standards Council.