FAQ Appraiser Credentials Qualifications

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Business Valuation FAQs

Find answers to common questions about company valuations, methodologies, and financial analysis

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What is the ABV credential?

The ABV (Accredited in Business Valuation) credential is a specialized certification offered by the American Institute of Certified Public Accountants (AICPA) for CPAs who demonstrate expertise in business valuation through education, examination, and experience requirements. This prestigious credential requires candidates to hold an active CPA license, complete 75 hours of business valuation continuing education, pass a comprehensive examination covering valuation theory and application, and demonstrate business valuation experience. The ABV credential is widely recognized as the gold standard for business valuation professionals in the accounting field, particularly for valuations required for tax purposes, estate planning, gift tax, and IRS compliance matters. ABV holders must adhere to strict professional standards including the AICPA Statement on Standards for Valuation Services (SSVS) and maintain continuing education requirements of 60 hours every three years with at least 36 hours in business valuation topics. The credential demonstrates competency in valuation approaches, discount and premium applications, report writing, and professional ethics. For clients, engaging an ABV credential holder provides assurance of technical expertise and adherence to professional standards that withstand IRS scrutiny and legal challenges.

What is the ASA designation?

The ASA (Accredited Senior Appraiser) designation is the highest credential offered by the American Society of Appraisers for business valuation professionals, requiring extensive education, rigorous examination, demonstrated experience, and adherence to Uniform Standards of Professional Appraisal Practice (USPAP). Candidates must complete comprehensive coursework in business valuation principles, pass two examinations covering valuation theory and case study application, and submit appraisal reports demonstrating competency that undergo peer review. The ASA designation requires a minimum of five years of full-time equivalent valuation experience and completion of the USPAP course. ASA credential holders are recognized internationally for business valuation expertise and are frequently engaged for complex valuations, litigation support, and situations requiring expert testimony. The designation encompasses multiple disciplines including business valuation, machinery and equipment, real property, and personal property, with the Business Valuation (BV) discipline being most relevant for company valuations. ASA members must complete continuing education requirements and recertify every five years to maintain their designation. The credential is particularly valued in litigation contexts where opposing counsel and courts recognize ASA professionals as qualified experts with rigorous training and ethical standards.

What is the CVA certification?

The CVA (Certified Valuation Analyst) certification is a professional credential offered by the National Association of Certified Valuators and Analysts (NACVA) for professionals specializing in business valuation, requiring completion of comprehensive training, examination, and demonstration of valuation competency. The CVA certification requires candidates to complete a five-day intensive training program covering valuation approaches, methodologies, discount and premium applications, and report writing, followed by a comprehensive examination testing theoretical knowledge and practical application. Unlike the ABV credential, CVA certification does not require CPA licensure, making it accessible to professionals from diverse backgrounds including financial analysts, consultants, and attorneys who perform business valuations. CVA holders must demonstrate practical experience through case study submissions and maintain continuing education requirements to keep their certification current. The credential is recognized for providing solid foundation in business valuation principles and is commonly held by professionals performing valuations for transaction advisory, litigation support, and corporate planning purposes. NACVA also offers advanced credentials including the Accredited Valuation Analyst (AVA) and Master Analyst in Financial Forensics (MAFF) for professionals seeking specialized expertise. The CVA certification emphasizes practical application and real-world valuation scenarios, preparing professionals to handle diverse valuation engagements across industries and purposes.

What is the difference between ABV, ASA, and CVA credentials?

The difference between ABV, ASA, and CVA credentials lies in their issuing organizations, eligibility requirements, examination rigor, and professional recognition, with ABV requiring CPA licensure and emphasizing tax and accounting applications, ASA requiring extensive experience and USPAP compliance with strongest litigation recognition, and CVA being most accessible without CPA requirement but potentially less recognized in certain contexts. The ABV credential from AICPA is restricted to licensed CPAs, requires 75 hours of education plus comprehensive examination, and is particularly valued for tax-related valuations including estate planning, gift tax, and IRS compliance matters. The ASA designation from the American Society of Appraisers requires five years of experience, comprehensive coursework, two rigorous examinations, peer-reviewed report submissions, and USPAP compliance, making it highly regarded in litigation and complex valuation contexts. The CVA certification from NACVA requires five-day training program and examination but does not mandate CPA licensure, making it accessible to broader professional base though potentially carrying less weight in certain regulatory or litigation contexts. All three credentials require continuing education to maintain certification, though specific requirements vary. For clients, ABV holders excel in tax and accounting-related valuations, ASA professionals are preferred for litigation and expert testimony, and CVA holders provide competent services across general valuation purposes. Many top valuation professionals hold multiple credentials to demonstrate comprehensive expertise and meet diverse client needs across different valuation purposes and jurisdictions.

Do I need a CPA to perform business valuations?

You do not need a CPA license to perform business valuations in most situations, as valuation expertise can come from professionals with diverse backgrounds including finance, economics, and business analysis, though CPA licensure is required for certain credentials like ABV and may be preferred or required for specific purposes like tax-related valuations. Many successful business appraisers hold credentials like ASA or CVA without CPA licensure, bringing strong financial analysis, industry expertise, and valuation methodology knowledge to their work. However, CPA licensure combined with valuation credentials provides advantages including deeper understanding of accounting principles, financial statement analysis, tax implications, and audit requirements that enhance valuation quality. For tax-related valuations including estate tax, gift tax, and charitable contributions, the IRS and tax courts often prefer or require appraisers with strong accounting credentials, making CPA plus ABV or ASA designation highly valuable. Litigation contexts may not require CPA licensure but demand credentials like ASA that demonstrate rigorous training and adherence to professional standards. The key is having appropriate credentials, training, and experience for the specific valuation purpose, whether that includes CPA licensure or not. Non-CPA valuation professionals often partner with CPAs for tax-related matters or focus on transaction advisory, fairness opinions, and strategic planning where CPA licensure is less critical. What matters most is demonstrated competency through recognized credentials, continuing education, practical experience, and adherence to professional valuation standards.

What is the CFA designation and how does it relate to valuations?

The CFA (Chartered Financial Analyst) designation is a globally recognized credential for investment professionals that requires passing three rigorous examinations covering investment analysis, portfolio management, ethics, and financial analysis, with curriculum including business valuation content though not specifically focused on private company appraisals. CFA charterholders possess strong skills in financial statement analysis, equity valuation, discounted cash flow modeling, and market-based valuation techniques that translate well to business valuation work. The CFA curriculum covers valuation methods including DCF analysis, comparable company analysis, precedent transactions, and residual income models that are fundamental to business valuations. However, the CFA program emphasizes public company valuation and investment analysis rather than private company appraisals, discount and premium applications, or compliance with valuation standards like USPAP or AICPA SSVS. Many CFA charterholders work in investment banking, private equity, or corporate development performing valuations for M&A transactions, fairness opinions, and investment decisions. For formal business appraisal purposes like tax compliance, estate planning, or litigation, CFA designation alone may not provide sufficient credentials, and additional certifications like ABV, ASA, or CVA are typically preferred. The combination of CFA with business valuation credentials creates powerful expertise blending investment analysis with appraisal methodology. CFA charterholders bring valuable perspective on market dynamics, investor expectations, and financial modeling that enhances valuation quality, particularly for growth companies and situations requiring sophisticated financial analysis.

What credentials should I look for in a business appraiser?

You should look for business appraisers holding recognized credentials including ABV (Accredited in Business Valuation), ASA (Accredited Senior Appraiser), or CVA (Certified Valuation Analyst), with the specific credential importance depending on your valuation purpose, whether it is tax compliance, litigation, transaction advisory, or strategic planning. For tax-related valuations including estate planning, gift tax, and IRS compliance, prioritize appraisers with ABV or ASA credentials demonstrating expertise in tax valuation standards and ability to withstand IRS scrutiny. For litigation support and expert testimony, ASA designation is highly valued because courts and opposing counsel recognize the rigorous experience requirements, peer review process, and USPAP compliance. For transaction advisory and general business purposes, CVA certification or combination of credentials demonstrates competency. Beyond credentials, verify the appraiser's experience in your industry, familiarity with your valuation purpose, and track record with similar engagements. Check for continuing education compliance ensuring the appraiser maintains current knowledge of valuation developments, tax law changes, and methodology advances. Confirm the appraiser carries professional liability insurance protecting you from errors or omissions. Review sample reports assessing whether the appraiser produces comprehensive, well-documented analyses meeting professional standards. Ask about the appraiser's testimony experience if litigation is possible, as courtroom competency requires different skills than report writing. Consider whether the appraiser works independently or with a firm providing peer review and quality control. Professional memberships in organizations like AICPA, ASA, or NACVA indicate commitment to the profession and access to continuing education and technical resources.

What is a Certified Valuation Analyst?

A Certified Valuation Analyst (CVA) is a professional who has earned the CVA certification from the National Association of Certified Valuators and Analysts (NACVA) by completing comprehensive business valuation training, passing a rigorous examination, and demonstrating practical competency in performing business appraisals. The CVA certification requires completion of a five-day intensive training program covering the three valuation approaches (income, market, and asset-based), discount and premium applications, normalizing adjustments, report writing standards, and professional ethics. Candidates must pass a comprehensive examination testing both theoretical knowledge and practical application of valuation principles to real-world scenarios. Unlike some credentials, CVA certification does not require CPA licensure, making it accessible to finance professionals, consultants, analysts, and others who perform business valuations. CVA holders must maintain their certification through continuing education requirements ensuring they stay current with valuation methodology developments, regulatory changes, and industry best practices. The credential is recognized for providing solid foundation in business valuation and is commonly held by professionals performing valuations for transaction purposes, litigation support, corporate planning, and general business advisory. Many CVA holders also pursue advanced NACVA credentials including AVA (Accredited Valuation Analyst) or specialize in areas like financial forensics through the MAFF (Master Analyst in Financial Forensics) designation. The CVA certification emphasizes practical skills and real-world application, preparing professionals to handle diverse valuation challenges across industries and engagement types.

What qualifications does a business valuator need?

A business valuator needs recognized professional credentials like ABV, ASA, or CVA demonstrating formal training and examination in valuation principles, practical experience performing diverse valuations across industries and purposes, strong financial analysis and accounting skills for analyzing financial statements and normalizing earnings, and adherence to professional standards including USPAP or AICPA SSVS. Educational background typically includes degrees in accounting, finance, economics, or business administration providing foundation in financial concepts. Formal valuation training through credential programs covers the three valuation approaches, discount rate determination, market multiple selection, discount and premium applications, and report writing standards. Practical experience should include exposure to various industries, business sizes, and valuation purposes including tax compliance, litigation, transactions, and strategic planning. Technical skills needed include financial modeling, DCF analysis, comparable company research, industry analysis, and statistical analysis for supporting conclusions. Professional judgment developed through experience helps valuators assess qualitative factors like management quality, competitive positioning, and industry dynamics that impact value. Communication skills are essential for explaining complex valuation concepts to clients, attorneys, and courts in understandable terms. Continuing education maintains current knowledge of tax law changes, accounting standard updates, valuation methodology developments, and court case precedents. Professional liability insurance protects clients from errors or omissions. For specialized purposes, additional qualifications may be needed such as USPAP certification for certain appraisals, expert witness experience for litigation, or industry-specific expertise for complex businesses. Membership in professional organizations provides access to technical resources, peer consultation, and ethical guidance.

How do I choose a qualified business appraiser?

You choose a qualified business appraiser by first verifying they hold appropriate credentials like ABV, ASA, or CVA relevant to your valuation purpose, then assessing their experience with similar businesses, industries, and engagement types, checking references from past clients, reviewing sample reports for quality and comprehensiveness, and confirming they carry professional liability insurance. Start by identifying the purpose of your valuation (tax compliance, litigation, sale transaction, estate planning) because different purposes favor different credentials; tax matters benefit from ABV or ASA, litigation prefers ASA with testimony experience, and general purposes accept CVA or combinations. Ask about the appraiser's industry experience because valuing manufacturing companies requires different expertise than valuing professional services or technology businesses. Inquire about similar engagement experience; if you need an ESOP valuation, choose an appraiser with ESOP expertise. Request and review sample reports assessing whether they are comprehensive, well-documented, clearly written, and compliant with professional standards. Check references from clients with similar needs, asking about responsiveness, report quality, ability to explain complex concepts, and whether the valuation withstood scrutiny. Verify continuing education compliance ensuring the appraiser maintains current knowledge. Confirm professional liability insurance coverage protecting you from potential errors. Assess communication style during initial consultations; you need an appraiser who explains concepts clearly and responds to questions promptly. Consider whether you need an individual appraiser or a firm with peer review processes and multiple experts. Discuss fees and timeline expectations upfront, though the lowest cost should not be the deciding factor when significant financial or legal consequences depend on valuation quality. Trust your instincts about professionalism, competence, and whether you feel confident working with the appraiser.

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