What It's Worth: Accounting Firm Value (PDF)

November 2015 978-1-62150-058-2 PDF

BVR (editor)

Business Valuation Resources, LLC

Revenue for accounting, tax preparation, bookkeeping, and payroll services in the U.S. increased by 9% in the first quarter of 2015 year-over-year and economic forecasts show that industry revenue will rise by an annual compounded rate of 6% between 2015 and 2019. Do rising revenues mean increasing value? Assigning value to accounting firms presents unique challenges. As professional practices, there are intangibles such as goodwill and covenants not to compete to consider, along with client mix, compensation and more.

BVR’s new What It’s Worth series starts out with Accounting Firm Value, which offers an in depth look at the value drivers in and the valuation of accounting firms. This report contains vital advice from industry experts for both firm owners and the appraisers who value them. These experts share their vast knowledge and best practices, which will bring readers up-to-date on the pressing issues and key drivers of practice value, along with data analysis that shows the latest benchmarks in accounting firm valuation.

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Table of Contents:

Introduction

Section I:  Value Drivers and Valuation Considerations for Accounting Firms

  • Unique Factors that Drive Accounting Practice Value
  • Top Ten Issues to Consider When Valuing an Accounting Firm
  • ‘Two-Legged’ Assets Drive Value in Professional Services Firm
  • Revenue Components Multiplier for an Accounting Practice: A Case Study
  • Document Request Checklist for Valuing an Accounting Practice
  • Common Errors in Valuing Professional Practices
  • Professional Practices:  Approaches to Valuation and Goodwill Considerations
  • Valuing Covenants Not to Compete:  An 11 Factor-Checklist

Section II:  Selling an Accounting Practice and Succession Planning

  • How Are Accounting Practices Sold?
  • Succession Planning Builds Accounting Firm Value

Section III:  Accounting Firm Value Benchmarking Data

  • Accounting Firm Valuation Multiples Based on Pratt’s Stats
  • Pricing an Accounting Practice--Rules of Thumb

Section IV:  Accounting Firm Value and the Courts

  • Accounting Firm Valuations in the Courts:  Four Mini-Case Studies

Case Digests

  • In re Marriage of Hanscam
  • Hill v. Hill
  • Scott v. Scott
  • Showell v. Pusey