Understanding Business Appraisers Accreditations

Business Valuation: What a Business Appraisers Accreditations Mean and What They Can Tell You About the Appraiser.

I want to address the by comparing and contrasting the requirements to obtain the various business valuation credentials.  Some of the designations are extremely difficult to achieve while others are not as stringent.

“Is the Business Appraiser a Full-Time Professional?

The following certifications indicate that the accredited business appraiser is a full-time experienced professional dedicated to the highest professional standards:

Certified Business Appraiser and Master Certified Business Appraiser

The CBA – Certified Business Appraiser – has the most demanding peer review and offers the most through, rigorous course work and training to be a business appraiser.  Awarded by the Institute of Business Appraisers, its peer review process is the most demanding in the industry with more than 75% of initial reports being returned for correction before being accepted.

The CBA is extremely difficult to obtain – this is well known in the industry.  As a specific example, in 2014 we had 47 candidates submit reports, of which two were passed.[1]  CBA’s (MCBAs) represent a premier group of BV professionals who had to cross the “Grand Canyon” to achieve their designation.  This is not something to be wasted, and like a rare coin, is something to be cherished” By Parnell Black, CEO of NACVA.

Because of its difficulty, the MCBA and the CBA is no longer offered.

Accredited Senior Appraiser

The ASA – Accredited Senior Appraiser – the professions preeminent standard being offered today.  It is awarded by the American Society of Appraisers only to those who have:

Completed over 10,000 hours of appraisal work
Only designation required to comply with USPAP[2]
Successfully passed more than 6 hours of written examinations
Have college education
And have had samples of their work product reviewed and accepted by a peer review committee.[3]

A candidate for the Accredited Senior Appraiser has to complete four business valuation courses for a total of 115 hours training hours plus 15 hours related to the Uniform Standards of Professional Appraisal Practice (“USPAP”).

Additional Less Rigorous Accreditations

There are other accreditations in business appraisal which you may find listed as part of a business appraiser’s credentials.  They do not have the same weight as the above top accreditations.  They are offered to professionals who have taken a prescribed set of courses and passed a written exam.

The Accredited in Business Valuation (“ABV”) credential is awarded by the AICPA to professionals that have taken 75 hours in class training.  The National Association of Certified Valuation Analysts awards a credential of Certified Valuation Analyst (“CVA”) to professionals who have taken a 40 hour class including an examination and completed a take home case study.[4]
Note: Neither of these credentials require peer review of work product”.[5]

The NACVA requires only 40 hours of training, the AICPA required only 75 hours of training while the American Society of Appraisers requires 130.20 hours of business valuation training and 15 hours training in the Uniform Standards of Professional Appraisal Practice.[6]

How to Find a Business Valuation Professional

Questions to ask your business valuation professional to determine their level of experience

What Designations or Credentials Do They Have?

The most rigorous to least rigorous range from the Certified Business Appraiser or Master Certified Business Appraiser, Accredited Senior Appraiser, Accredited in Business Valuation and or a Certified valuation Analyst.

What percentage of their time do they spend doing business valuations?

A large number of business valuation credential holders perform business valuations.  However, they perform them on a part-time basis in that they have accounting practices and cannot devote sufficient time to the business valuations.  A number of years ago I received an email from an individual for assistance in doing an engagement for multiple companies.  I looked him up on the internet and read his website.  It was very impressive and I was not sure why he was contacting me.  His website stated that he had four years of business valuation experience.  He told me that he had performed about two valuations for each of the prior four years.  Yes, he had four years of experience but had only valued about eight companies.

Is business valuations the major part of their practice area?

Ask the expert what percentage of time they devote to doing business valuations verses other professional services.

How many hundreds business valuation reports have they been responsible for completing?

Have they or do they currently teach any courses on business valuations?

What courses have they prepared and instructed?

Where and when were the presentations made?

What are the topics that were taught?

Have they Published Any Articles or Books on Business Valuations

Ask for a list of the articles published

Ask for a list of books published

How Many Hours of Continuing Education Do You Receive Each Year in Business Valuations

This should be the largest area of concentration

If they are a Credentialed Business Valuation Professional, ask for a copy of their annual reporting of Continuing Professional Education

My staff and I normally get in excess of 100 hours of Continuing Professional Education each year in business valuation related courses.

Qualifications of J. Richard Claywell, CPA

I am a Certified Public Accountant (CPA) licensed to practice in the State of Texas since 1982.  In addition, I have the following business valuation credentials: Accredited in Business Valuation (ABV), Accredited Senior Appraiser in Business Valuations (ASA), Certified Business Appraiser (CBA), International Certified Valuation Specialist (ICVS), Certified Valuation Analyst (CVA), Master Analyst in Financial Forensics (MAFF), Certified in Fraud Deterrence (CFD), Accredited in Business Valuation Review (ABAR), Certified Value Growth Advisor (CVGA) and a Master’s Degree in Business Valuation (MBV).  Richard is also the Chairman of the International Association of Certified Valuation Specialists.

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[1] This is a 4.3% pass rate.

[2] USPAP means Uniform Standard of Professional Appraisal Practice

[3] I did not discuss the CBI – Certified Business Intermediary as it is designed for business brokers.

[4] Candidate allowed up to 5 hours to complete the exam.

[5] Merrimack Business Appraisers, Understanding Business Appraiser’s Accreditations, 2022

[6] See the NACVA and ASA website for requirement for certification.