AICPA Issues First Statement on Standards for Valuation Services

The AICPA’s Consulting Services Executive Committee has released the first new professional standard on valuation services, Statement on Standards for Valuation Services No. 1, “Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset.” The standard provides guidelines to CPAs for developing estimates of value and reporting on the results. It applies to AICPA members who perform an engagement that estimates the value of a business, business interest, security or intangible asset for numerous purposes, including sales transactions, financing, taxation, financial reporting, mergers and acquisitions, management and financial planning and litigation. SSVS No. 1 is effective for engagements accepted on or after Jan. 1, 2008.

“The AICPA developed the valuation standard to improve the consistency and quality of practice among its members who perform engagements that estimate values for various reasons,” said AICPA President and CEO Barry Melancon. “Congress, government agencies and accounting regulators have recently focused their attention on appraisal issues – such activity shows the importance of valuation to the business community and individuals. The standard promotes greater transparency and provides our members with a set of guidelines in the unique context of a CPA practice.”

SSVS No. 1 specifies two types of engagements: valuation engagements and calculation engagements. For valuation engagements, two types of written reports are permitted – detailed reports and summary reports. For calculation engagements, one type of written report is permitted – calculation reports. Oral reports are allowed for all engagements under the standard.

SSVS No. 1 was issued after members’ input on earlier exposure drafts was incorporated. While the effective date is not until Jan. 1, 2008, the AICPA is urging firms and CPAs to begin earlier implementation.

A copy of the standard is available from www.aicpa.org/bvstandard, as is a toolkit for members and state CPA societies to help them understand and implement the new standard. It includes a fact sheet, frequently asked questions and various slide decks. New resources will be added periodically.

More than 25,000 CPAs currently provide business valuation and forensic & litigation services, and more than 2,500 CPAs hold the AICPA’s Accredited in Business Valuation credential demonstrating their expertise as preferred valuation professionals. For information about ABV, visit: