Valuations in Buy/Sell Agreements for Private Companies and Businesses
Mastering Standards and Best Practices to Calculate and Update Fair Market Value
Recording of a 110-minute CPE webinar with Q&A
This teleconference will prepare advisors to decide how and when to apply valuation methods to a private business or company that uses a buy/sell agreement, as well as to understand what is expected with different valuation standards under different circumstances.
Outline
- Typical goals of a buy/sell agreement
- Owners’ interests will be purchased following a “triggering event”
- E.g., death, need to sell, retirement of an owner
- Mechanism to set a purchase price depending on market conditions and other factors
- Provide a funding source (e.g., insurance policies) to offset liquidity demands
- Different possible insurance structures
- Valuing a deceased owner’s interest, for estate tax purposes
- Owners’ interests will be purchased following a “triggering event”
- Valuation methods that can be used to establish and update value of owner’s interest
- Standard methods
- Book value
- Capitalization of earnings
- Discounted cash flow
- Sales-multiple valuations
- Alternatives to fair market value approach
- Standard methods
- Valuation standards that can come into play with buy/sell agreements
- AICPA SSVS No. 1
- Appraisal Foundation Uniform Standards of Professional Practice (USPAP)
- American Society of Appraisers, “Business Valuation Standards”
- Current best practices with valuing private businesses for buy/sell agreements
Benefits
The panel will review these and other key questions:
- Valuation methods that may apply: Book value, capitalization of earnings, discounted cash flow, sales-multiples valuation and others.
- Applicability and key terms of valuation standards: AICPA SSVS No. 1, Appraisal Foundation Uniform Standards of Professional Practice (USPAP), American Society of Appraisers "Business Valuation Standards."
- Related aspects of a buy/sell agreement: Updating the business value and adjusting for growth and inflation, examining underlying insurance policies.
Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.
Faculty

James Alerding
Partner
Clifton Gunderson
He has worked in business valuations for more than 30 years and has helped a number of business clients in both sale... | Read More
He has worked in business valuations for more than 30 years and has helped a number of business clients in both sale and purchase situations. He speaks and writes frequently on the subject of valuations of closely held businesses.
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Brian Bornino
Director of Valuation Services
GBQ Consulting
In his career in regional and national valuation practices or firms, he has worked on more than 1,200 business... | Read More
In his career in regional and national valuation practices or firms, he has worked on more than 1,200 business valuation engagements. He also chairs a regional valuation practice within the BDO Seidman Alliance.
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Kelly Noll
Senior Financial Analyst
GBQ Consulting
She has worked on more than 100 valuation engagements in industries ranging from wholesale/distribution to construction... | Read More
She has worked on more than 100 valuation engagements in industries ranging from wholesale/distribution to construction to airlines. Before coming to GBQ, she worked on secured and unsecured transactions for National City Bank.
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