How does a business valuation differ depending on the purpose?

The purpose of a business valuation significantly affects the standard of value applied, the methodologies used, and the way the results are reported and documented. For example, an estate and gift tax valuation must follow IRS requirements and may involve applying discounts for lack of control or lack of marketability that are not applicable in a transaction context. A litigation valuation may need to meet specific evidentiary standards and be prepared for scrutiny by opposing professionals. An M&A valuation focuses on the value a specific buyer would realize, which may differ from fair market value. Yeo & Yeo’s professionals understand these distinctions and tailor each valuation to the specific purpose, ensuring it delivers the accuracy, compliance, and defensibility the situation requires.