When Attorney D. Charles Mauritz’ (Duffy Kekel LLP) spoke in BVR’s conference room last Friday at NACVA’s local chapter meeting, he placed a heavy emphasis on the most valuable contribution a valuation expert brings to the table—an opinion. Mauritz reiterated the all-to-familiar phrase that valuation is “more art than science,” and that it’s the appraisers who produce reports that are more science than art who worry him.
While it is important to present the data in a report, it’s how you interpret the data that truly matters. As your report flows from introduction to conclusion, clearly state your opinion about why your determinations and processes are relevant. In essence, a valuation report should leave the reader with no “whys”—Why did the expert choose these comparable transactions and not others? Why did the expert weight the income approach higher than the market approach? Why did the expert arrive at 6% for a company specific risk premium? A valuation report should provide answers and an expert’s opinion, not leave the reader with questions. “That’s what we [attorneys] are paying you for,” says Mauritz.