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CPAs are particularly well suited to provide valuation advisory services. Here's a look at the variety of engagements, and developments that are changing their nature.
Business valuation is the No. 1 niche service for Accounting Today's top 100 firms. Almost 90 percent of the firms that responded indicate that niche showed an increase in revenue for FYE 2004. It should come as no surprise that because of the financial aspects involved, accounting firms would be so successful.
The Different Engagements
Edward Dupke, partner and practice director for business valuation and litigation services with Michigan-based The Rehmann Group, who is also the chair of the AICPA Business Valuation Standards Task Force, describes his firm's valuation practice as "covering a pretty broad spectrum." He explains, "Certainly family law and the whole area of divorce is one. Then there are the corporate reasons. There can be a corporate divorce because shareholders aren't getting along, and there is a dissenting shareholder action. Then there are the more normal corporate purposes, which can be a buy/sell among the shareholders, a buyout, a merger, an acquisition, or a potential sale. Another significant large area for us is estate and gift planning."
Another firm that performs a multitude of valuation services is KLR (Kahn, Litwin, Rensa & Co.) in Providence. R.I. "We do just about everything possible in the business valuation world. We do a lot of estate and gift work, a good amount of shareholder disputes, and have a very large divorce practice. We put together the valuation provisions in buy/sell agreements, are involved with the sale and acquisition of a business, and have done some work with regard to FASB's FAS No. 141 and 142. In litigation support, we do damage calculations on all types of the property," explains Peri Ann Aptaker, principal and director of tax services, who shares responsibility for managing the firm's valuation department.
Dr. Joan Lipton, managing director of Lazar Lipton Valuation Services, an affiliate of the New York City accounting firm of Lazar Levine & Felix, explains that her firm does financial valuations of the full range of business interests, both equity and debt interest. It values intangible assets, and has a specialty in litigation-related value work, such as divorces and shareholder and...