Accredited in Business Valuations - Explained
What is Accredited in Business Valuation?
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Table of ContentsWhat is Accredited In Business Valuation?How Does Accredited In Business Valuation Work?Organizations that provide Credentials for Business ValuationsAccredited In Business Valuation RequirementsBusiness and Education Requirements for ABV CredentialCredited In Business Valuation ExamAreas Where ABV Credential Knowledge can be AppliedCareer Opportunities for an ABV Credential Holder
What is Accredited In Business Valuation?
Accredited in Business Valuation (ABV) is an expert name given to CPAs who are specialists in calculating the businesses value. The ABV certification operates under the management of the American Institute of Certified Public Accountants (AICPA). To get ABV certification, candidates must complete an application procedure, sit for exam and pass. The candidate must also meet the required minimum business valuation experience and requirements, and also pay for certification fee. It is important to note that, for you to be able to maintain the ABV credential, you must have the required standardized minimum work experience and have the ability to continue learning.
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How Does Accredited In Business Valuation Work?
The accredited ABV credential is given to those Certified Public Accountants (CPA) holders who have proved to have outstanding knowledge, competencies, and experience in business valuation. If you are able to obtain an ABV certification, it will open ways for you to work for firms such as, consulting, business valuation, and other companies that deal with business value more often. ABV credential study program, cover the following areas:
- The basic business valuation process
- Valuation analysis
- Professional standards
- Qualitative and quantitative analysis
- Financial litigation and reporting among others.
Organizations that provide Credentials for Business Valuations
There are several organizations that provide credentials for business valuations. They include the following:
- American Institute of Certified Planners Association (AICPA)-This is an accredited business valuation (ABV) credential. Which means it is a recognized organization with authority to provide credentials for business valuation.
- The National Association of Certified Valuators and Analysts (NACVA). This is also an authorized body that provides Certified Valuation Analyst (CVA) Credential.
- The American Society of Appraisers- This one has been authorized to provide the Accredited Senior Appraisal (ASA) credential.
Note that each one of the above organizations will always have reasons to defend their certification to be the best. However, credentials offered from all of the above organizations are all of equal value. Therefore, obtaining credentials from any of the three (AICP, NACVA, or ASA) will be a plus as they are all good at training and producing competent valuation experts. So, when doing overall valuation, you should be guided by what you regard to be your best and easiest area of specialization. Some of the above organizations do have eligibility requirements which are also good enough to let you know which ABA credential provider perfectly meets your needs. For instance, to be able to obtain an ABV credential from the AICP, you must be a licensed CPA practitioner. This then eliminates those individuals who have no interest in pursuing a career in CPA. For ASA, you are required to have worked for 5 years as valuation provider on a full-time basis, to be able to qualify for ABA credential from ASA.
Accredited In Business Valuation Requirements
There are various requirements that candidates seeking an ABV credential should meet. They are as follows: Must have a valid CPA license or certification from state authority. Must have done and passed the ABV examination. However, some exceptions may apply. For instance, this requirement provides a waiver to a candidate who is:
- Accredited member of the Accredited Senior Appraiser (ASA)
- Credential holder of the American Society of Appraisers
- Holder of Certified Financial Actuary
- Chartered Business Valuator
- Credential holder of Canadian Institute of Chartered Business Valuators
Must pay an annual fee estimated at hundreds of dollars.
Business and Education Requirements for ABV Credential
- Within the 5-years period experience, an ABV candidate must have gotten an ABV experience of not less than 150-hours. This should be done before the credential application date.
- Apply and complete a 15-hour experience on practical business valuation case study track from the AICPA Forensic and Valuation Services Conference.
- Must go through a complete 75-hours valuation-related continuing professional development (CPD). The 75-hours should be obtained from the 5-year period prior to the ABV application date.
Credited In Business Valuation Exam
The ABV Exam is administered electronically using computers. They consist of two sections which must be passed within one year. This is determined by the date you passed your first section to obtain an ABV credit. When administering ABV credential exams, the applicants are allocated 3 hours and 15 minutes to work on each part. This includes a 15-minute break. Each module has 90 multiple-choice questions. Also, the better part of the exam has different multiple-choice questions. There are 12 questions involving case studies with multiple-choice answers. As a candidate, you are expected to analyze the case studies and come up with a possible best solution to each of the case studies. The questions are generally administered for the purpose of testing the candidates analytical and application abilities on valuation theory and practice. Note that since the candidates use a computer to do the exams, for credibility purposes, its use must be in line with the International Glossary of Business Valuation Terms.
Areas Where ABV Credential Knowledge can be Applied
ABA knowledge can be applied in the following business situations:
- When an opportunity for selling or merging business arises.
- When there is a need to transfer the business to other partners or to the family members.
- When there is a plan to expand the business and the business must secure capital to facilitate business expansion.
- When there is a business owner plans to retire from business, and he or she wants to implement a strategic exit.
- When a business plans to bring new partners on board and the buy-in-the price has to be determined.
- When there is a need to divide or dissolve a business as a result of business partners or shareholders plan to exit from the business.
- When a business is involved in a financial lawsuit.
- When those in business want to put their focus on growing company value.
Career Opportunities for an ABV Credential Holder
The ABV credential is a very significant exam for the CPA persons providing valuation services. As a CPA valuation provider, the ABV credential will help you to further your career and improve on your expertise. There are reasons why a CPA holder should take ABV certification. Importantly, it help one become an expert in both fields. As a CPA expert, qualifying for an ABV credential has the following benefits:
- It will give you additional credibility with your current and potential future clients, and also with the organization you work for. In other words, the ABA credential boosts clients confidence that you are capable of delivering credible results when hired.
- It will position you as one of the sorted after valuation provider. In other words, if you are a holder of ABV certification, you will be considered to have premium(best) business valuation skills. You are crowned to be trustworthy, competent valuation professional.
- The credential also expands your opportunities for referrals from other practitioners, strategic partners, attorneys, and clients.
- Offers good income opportunities. With ABA credentials, you stand a good chance of landing a well-paying evaluation job or contract form private corporations, banks, mortgage companies, consulting companies, and investment brokerages among others.
- It also opens room for self-employment where you will be able to work for well-paying direct clients.
Summary Besides credentials, you need to align yourself with someone who has business valuation experience. It should be a valuation expert with lots of experience from a company, who can help you get proper training. However, before you decide which firm to get training from, you first need to find out which training, in particular, the firm will provide. This is because the training of this kind are usually expensive and firms that actively practice are likely to meet for the training cost. Also, since you need practical experience in the business valuation areas, the firm you seek to train from should be able to provide you with the required experience so that you can succeed in getting an ABV credential.