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- How do you value the machinery and equipment?
We use the cost approach, sales comparison approach, and income approach. In some cases we use one, two or all three approaches to value.
- What exactly is an Intangible Asset?
An intangible asset is an identifiable non-monetary asset without physical substance. It is a resource that is controlled by the business entity as a result of past events, by purchase or self-creation. There are three critical attributes of an intangible asset:
- Identifiable. The asset is identifiable and separable.
- Control. The business has the claim to obtain benefits from the asset.
- Future economic benefits. The asset must provide future revenues or reduced future costs.
- Why do you need employee data for a Customer Relationship valuation?
An Assembled Workforce valuation must be performed because it is a component of the Capital Assets charges. These capital charges consist of a return on associated fixed assets, working capital, an assembled workforce and other identified intangible assets, as an expense against the cash flow generation of the Customer Relationship intangible asset.
- What is the remaining legal life which can be associated to my registered patents?
The U.S. Patent & Trademark Office sets the legal lives of patents in the United States, and for U.S. utility patents, the term is 20 years from the filing date. However, older utility patents, filed before June 8, 1995 will have a 17-year life from the date granted. This is when the lifing policy was adjusted to measure from the filing date, instead of the date granted. However, a U.S. design patent term is 14 years from patent grant. Additionally, your international patent registrations will typically have a 20 year term.
- Will your experts be available to discuss my appraisal with my audit firm?
At Enterprise Appraisal Company will discuss your appraisal and our approach before we prepare our proposal for service, to insure agreement and efficient use of resources. After report issue, our experts are available to resolve questions or needs your audit firm may have.
- What approach will you use and how will it be decided?
For Fair Value appraisal, under FASB 157, the appraiser is required to first consider a market approach. If the market approach cannot provide a suitable value, we will use income and/or cost approaches, depending on the assignment.
- What information will be required of us in order for you to perform a credible business appraisal?
We will normally request historical financials, income forecasts and projections, descriptions of the business, operating details, and other data that will aid in making the qualitative and quantitative judgments required to reach a conclusion of value for the business.
- How will you arrive at the discount rate?
Discount rates are developed based on the subject company's size and performance, market data from reputable published sources, and our own research of other companies in the marketplace. Components normally researched will include overall market premiums, stock price volatility, capitalization structures, market risk factors, and company-specific risk.
- By what means will the results of your appraisal be transmitted to us?
Preliminary conclusions of value with limited back-up worksheets will be transmitted upon arriving at an initial value. After review, a report will be prepared in draft format for your review. Ultimately, a final report will be prepared and transmitted in electronic format followed by a hard copy by mail, if desired.
- What kind of support will your report provide for the valuation conclusion?
Our report will give a detailed description of the entire valuation process, including references to external data sources and exhibits as appropriate. The report will discuss the purpose, company background, financial performance, business projections, valuation approach and methodology, assumptions, and limiting conditions that support the final conclusion of value.
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