Business Valuation Resources

At Acclaro, we strive to add clarity to the business transition process. The resources below will provide additional insight on the importance of receiving objective, impartial valuation services as well as tips for those who are seeking ways to effectively plan and execute an exit strategy from their businesses.


The Independent Review of an ESOP Valuation Report - Part 1

Under the Employee Retirement Income Security Act (ERISA), an ESOP's named fiduciary is charged with the responsibility of determining whether the consideration paid in a transaction represents adequate consideration.  The named fiduciary also has this same responsibility with respect to the annual update valuation... read more


The Independent Review of a Valuation Report - Part 2

In "The Independent Review of a Valuation Report – Part 1", we discussed the need for an independent review of a business valuation report prepared by an appraiser for ESOP purposes.  But this is just one of many situations in which one would want an independent review of a business valuation report by a review appraiser... read more


Determining the Value of a Business

The process used for determining the value of a business is fairly complex and consists of many moving parts. For most operating businesses, the value of the business is based on the economic benefits that it provides its owners and the risk that the owners have in receiving those economic benefits... read more


The 5 Benefits of an Employee Stock Ownership Plan

Business owners who are considering how and when they will cash in the shares of their privately held stock are often curious about whether or not an Employee Stock Ownership Plan (ESOP) can be of assistance in helping them reach their goals.  Although there are many details to ESOPs that need to be examined with the assistance of professional resources, the summary is that there is an exchange of unique tax incentives for owners who... read more


ESOPs Make Very Good Business Sense

It has been common knowledge for quite some time that ESOPs (Employee Stock Ownership Plans) make very good business sense. This statement is backed up by research. Study after study has shown that businesses which are employee owned usually have a definite advantage over those that are not... read more


ESOP Valuation White Paper

By Glenn Ball, CPA/ABV, ASA

I recently contributed to the writing of a white paper about ESOP valuations titled, "Valuation and Transactional Issues Associated With Employee Stock Ownership Plans," published by the American Institute of Certified Public Accountants (AICPA)... read more


Common Pitfalls of Being an ESOP Trustee

By Glenn Ball, CPA/ABV, ASA

If you have spent time around the ESOP world, you know that, in addition to all of the wonderful benefits an ESOP brings to a sponsor company, there are complexities and various pitfalls to be aware of as well... read more


Business Valuation Credentials: What Do They All Mean?

What are the credentials for business appraisers?  Are the credentials important? And what do they mean?  Here are the essentials on business valuation credentials... read more


ESOP Valuation - Part 1 - What Is It and Why Do I Need It?

Valuation is a process and a set of procedures used to estimate the economic value of an owner's interest in the business.  The valuation process is used by buyers and sellers of closely held businesses to determine the price they are willing to pay or receive to consummate a sale of a business.  Valuations also are used for a wide variety of purposes such as financial reporting, stockholder buy/sell matters, and resolving disputes related to estate/gift taxation and marital dissolution... read more


ESOP Valuation - Part 2 - Vetting an ESOP Appraiser

We touched upon an important point in our last article:  the importance of choosing a qualified ESOP appraiser.  We have heard it said that any appraiser worth his/her weight should be able to perform an ESOP valuation because the methodologies and approaches are the same regardless of who holds the employer stock.  This perspective betrays a somewhat naive view about the nuanced world of ESOPs.  In this article, we will elaborate on the subject of how to choose an ESOP appraiser carefully and provide a helpful downloadable checklist... read more


ESOP Valuation - Part 3 - Who Hires the Appraiser?

In Part 2 of this article series on ESOP valuation we discussed the importance of vetting an ESOP appraiser and recommended some criteria for your deliberations.  Once a qualified appraiser has been selected, the next step is to hire him or her... read more


ESOP Valuation - Part 4 - Preparing for the Annual ESOP Valuation

As a member of the management team of a company that sponsors an ESOP, you may be involved with the annual (if not more frequent) ritual of the administrative ESOP valuation, commonly known as the annual ESOP update.  This is not to be confused with a transaction valuation, in which the fair market value is established to set the bar for the parties involved in an ESOP transaction.  In this context, the fair market value "bar" establishes the maximum value, by law, at which a selling stockholder(s) can sell his/her stock to either a newly formed ESOP or an existing one.  In this article, however, we will focus on the annual ESOP update valuation (the "annual valuation")... read more


ESOP Valuation - Part 5 - A Closer Look at the Valuation Report

Other articles in this series on ESOP valuation have touched on who hires the ESOP appraiser and which documents are needed by the ESOP appraiser to perform a valuation.  In this article, we will discuss the general contents of a valuation report in the context of an annual administrative ESOP update valuation.  This report is required by ERISA law as well as by the Department of Labor, one of the two regulatory agencies overseeing ESOPs (the other agency being the Internal Revenue Service)... read more


How to Identify Prospective ESOP Situations for Ownership Transition

In today's corporate and tax environment, successful ownership transition can sometimes be perplexing.  While many alternatives are available to accomplish this ownership transition objective, only a few alternatives are appropriate for any given set of circumstances.  The options typically include an initial public offering, a management buyout, a recapitalization, a sale to a third party, a sale to an employee stock ownership plan (ESOP), a joint venture, and others... read more


How to Help Ensure a Credible Valuation Report

Every business owner who is thinking of selling a business wants to be assured that the valuation report he or she receives is credible.  It's very important that the business, typically a person's greatest asset, be appraised accurately and a credible and fair value be determined... read more


Key Drivers of Value - Part 1 - The Value Trifecta

Look Familiar?  For many who have studied finance, the above equation is probably familiar in some form or another.  The equation is known by many different names such as the Gordon growth model and capitalization model, and its numerator and denominator work with many different inputs.  Those in the valuation community associate this model with what is called the earnings approach.  The bottom line is that, no matter what inputs you use or whatever form this equation takes, this model does one thing: it converts some form of an anticipated economic benefit into value.  And your appraisal expert is using it to estimate the value of your business... read more


Key Drivers of Value - Part 2 - The Benefit Stream

In a previous article, The Value Trifecta, we discussed a three-part equation concerning the intricate interrelations between profitability, risk, and growth and why this equation is important to business owners and managers... read more


Key Drivers of Value - Part 3 - The Cost of Capital

In previous articles, we discussed the "value trifecta" and profitability, risk and growth, and explored in depth the first of these components, profitability.  This article will discuss the second component of the value trifecta, risk... read more


Key Drivers of Value - Part 4 - The Growth Rate

In recent postings in this article series, we discussed two of the three value components in the equation below (commonly referred to as the Gordon growth model), the benefit stream and the discount rate.  In this article, we would like to cover the third and final component, the long-term sustainable growth rate... read more