Report Writing

This chapter discusses the process of report writing used in financial valuation. The Uniform Standards of Professional Appraisal Practice (USPAP) are applicable to those who adhere to USPAP and/or where the intended user of the appraisal report is a federally insured depository institution and the intended use is a federally related transaction. Business valuation has only two types of reports: appraisal report and restricted use appraisal report. Appraisal reports are provided when the intended users are other than the client. When the client is the intended user, a restricted use appraisal report may be provided. Generally, the main differences in the two business valuation reports are the content and level of information. Analysts primarily produce two general types of valuation reports: complete valuation report and other business valuation reports. The complete valuation report is appropriate, when required or requested, when the analyst has been engaged to prepare a complete valuation of a business, an interest in a business, a security, or an intangible asset. The chapter discusses the various sections contained in a complete valuation report, which include valuation summary or letter of transmittal, table of contents, introduction, sources of information, analysis of the company or entity, analysis of economic conditions, analysis of industry conditions, financial statement analysis, valuation approaches and methods considered, and valuation approaches and methods used. Each of these sections documents an important part of the analyst's thought process toward reaching the conclusion of value. Other business valuation reports may be prepared for a variety of purposes that are specific to the respective valuation engagements. These other valuation engagements are often lesser in scope than a complete valuation engagement.