A bit of background on the profession
- CBVs are members of the Canadian Institute of Chartered Business Valuators (CICBV) which was created in 1971.
- There are approximately 1,400 CBVs in Canada, many of them practicing business valuation only part time. We have chosen to work full time in business valuation.
- CBVs are recognized by the Canadian Institute of Chartered Accountants (CICA) as the experts in business valuation in Canada.
- CBVs are acknowledged by the Courts as the experts in the field of business valuation.
- CICBV Standards of Practice are considered industry standards by many Canadian regulatory bodies.
- Most CBVs are also member of the canadian institute of chartered accountants (ICCA).
- The requirements for becoming a CBV are : successfully pass the comprehensive Program of Studies in Business and Securities Valuation offered by York University and the Canadian Institute of Business Valuators (CICBV), accumulating 1,500 hours of work in the field and pass the final CICBV exam. The applicant must also have a post-secondary degree or an accounting designation.
Roles of a Chartered Business Valuator
An expert in business valuation can be called upon in different capacities, according to circumstances.
As independent experts, we may be called in to determine the fair market value of a business:
By one of the parties (individual mandate), or by both parties (joint mandate).
In the case of a joint mandate, the business valuation may bind the parties or not.
It is important to note in such a case that Mr. Desnoyers is a certified mediator and that he has completed Level I in collaborative law.
When acting as a consultant, the CBV can select information and assumptions that although reasonable, will be favourable to his client’s interests. He can include valuation schedules or a preliminary report –valuation report draft–, but not a final valuation report.
Depending on his experience, the CBV may provide valuable advice to his clients, whether for negotiation purposes or others’.
Should two parties have separate and different valuations, the CBV could act as mediator to help them come to an agreement on the value of the business. In such a case, it is good to remember that Mr. Desnoyers is a certified mediator and that he has completed Level I in collaborative law.
Should two parties have separate and different valuations, the CBV can be called in as arbitrator to help the parties come to an agreement on the value of the business.
As an arbitrator, his role is to help the parties come to an agreement, and if this is not possible, to decide on the fair market value of the business in question. The CBV’s decision is then final.
Most frequent mandates of a CBV
It is most useful and beneficial to request the services of a CBV under the following circumstances:
- Separation or divorce of a business owner or of a self-employed worker
- Selling, merging or acquiring a business in part or in total
- Planning the business succession
- Tax reorganization
- Dispute between shareholders or co-owners
- Damage quantification
You are not sure that you need a business valuation expert? Contact us to talk about it, free of charge. As we discuss with you and understand your needs, our experience will help us determine if you or your client would benefit from our services.
Types of business valuation reports
A CBV can produce three types of report:
- Calculation of value report
- Estimate of value report
- Comprehensive valuation report
The difference between the three reports:
- The scope of the examination, in the amount of research and analysis performed
- The written details supplied by the expert on the approach used to determine the value of the business.
What is the most appropriate report for my needs?
The calculation valuation report is the one with the least research, analysis and explanations and the comprehensive valuation report is the one with the most.
In everyday business, the calculation valuation report meets the needs adequately in most cases involving small or medium size enterprises.
You are not sure of the most appropriate business valuation report? Contact us to talk about it, free of charge.
Ce message est également disponible en : French