Statement on Standards for Valuation Services 1 (SSVS1)
Summary of Key Concepts
of the American Institute of Certified Public Accountants’ (AICPA)
Statement on Standards for Valuation Services 1 (SSVS1).
Section 1
The Need for Business Valuation
Noting the number of transactions (mergers, acquisitions, initial public offerings (IPOs), etc.), litigations (contractual disputes, bankruptcies, intellectual property right disputes, etc), and engagements (compliance-oriented – financial reporting, and planning-oriented – income tax) present in the business and accounting world, the need for business valuation has never been greater. Valuations of businesses, ownership interests, securities and intangible assets are needed for the business purposes outlined above.
The American Institute of Certified Public Accountants (AICPA), noting the increasing number of its members that are engaged in business valuation engagements, wrote the Statement on Standards for Valuation Services 1 (SSVS1) in order to promote uniformity in the practice of business valuations performed by its members.
Section 2
Scope of Statement on Standards for Valuation Services 1 (SSVS1)
SSVS1 establishes standards that should be followed by AICPA members who are engaged to estimate the value of a business, security or intangible asset. The engagement would be any, in part or whole, that involves estimating the value of a subject/business of interest and results in the expressing of a concluded value or a calculated value. Wherein there exists any governmental regulation or other professional standards that are applicable to the client, the valuation analyst should ensure she/he is aware of the extent to which these regulations or other standards apply to the engagement to estimate the value of the business, security or intangible asset. Where there are differences between the standards outlined within SSVS1 and the
of the American Institute of Certified Public Accountants’ (AICPA)
Statement on Standards for Valuation Services 1 (SSVS1).
Section 1
The Need for Business Valuation
Noting the number of transactions (mergers, acquisitions, initial public offerings (IPOs), etc.), litigations (contractual disputes, bankruptcies, intellectual property right disputes, etc), and engagements (compliance-oriented – financial reporting, and planning-oriented – income tax) present in the business and accounting world, the need for business valuation has never been greater. Valuations of businesses, ownership interests, securities and intangible assets are needed for the business purposes outlined above.
The American Institute of Certified Public Accountants (AICPA), noting the increasing number of its members that are engaged in business valuation engagements, wrote the Statement on Standards for Valuation Services 1 (SSVS1) in order to promote uniformity in the practice of business valuations performed by its members.
Section 2
Scope of Statement on Standards for Valuation Services 1 (SSVS1)
SSVS1 establishes standards that should be followed by AICPA members who are engaged to estimate the value of a business, security or intangible asset. The engagement would be any, in part or whole, that involves estimating the value of a subject/business of interest and results in the expressing of a concluded value or a calculated value. Wherein there exists any governmental regulation or other professional standards that are applicable to the client, the valuation analyst should ensure she/he is aware of the extent to which these regulations or other standards apply to the engagement to estimate the value of the business, security or intangible asset. Where there are differences between the standards outlined within SSVS1 and the
Bibliography: American Institute of Certified Public Accountants July 2007; Statement on Standards for Valuation Services 1(SSVS1) ; accessed on March 15, 2008.