Frequently Asked Questions

  • How long does it take to complete an appraisal?

    Most appraisal assignments require 1-4 weeks to complete, depending on the complexity of the assignment, whether a written report is required, and the amount of data available.

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  • How do you charge for your engagements?

    Many of our engagements are priced on a fixed fee basis, with fees ranging between $5,000 and $15,000.  Certain consulting, advisory and litigation-related assignments are priced on an hourly basis, at rates of $275/hour.  However, wherever possible, we try to work on a fee-for-project basis.

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  • Is my information confidential?

    The Uniform Standards of Professional Appraisal Practice require that all client information is kept confidential for 5 years after the end of an engagement or 2 years after the disposition of a legal matter.  Even disclosing the identity of our clients without their permission is prohibited.

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  • Do you accept contingency fees?

    No.  Accepting fees that are contingent upon an appraisal result is a violation of professional standards and ethics in the business valuation community.  A key source of Arpeggio Advisors’ value is its independence.  We would not be independent if we accepted a contingency fee of any kind.

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  • Why are your engagement letters so long?

    While we try to keep our engagement letters as short as possible, the complexity of business appraisal engagements and professional business valuation standards require that engagement letters be quite detailed.

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  • If you’re my expert witness, does that mean that you will also produce and present the value that I’m hoping for?

    No.  We call each case as we see it.  Professional standards and ethics in business valuation require an appraiser to perform each appraisal engagement with independence and objectivity.  We are advocates for our opinions, not our litigation clients.

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  • What is a Qualified Appraisal?

    A “Qualified Appraisal” is defined in the Pension Protection Act as an appraisal that is (1) treated as a qualified appraisal under regulations or other guidance prescribed by the Secretary, and (2) conducted by a qualified appraiser in accordance with generally accepted appraisal standards and any regulations or other guidance prescribed by the Secretary [of the I.R.S.].

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  • What is a Qualified Appraiser?

    The Internal Revenue Service requires that the appraisal used to report the amount of tax owed be prepared by a Qualified Appraiser.  A Qualified Appraiser is defined in the Pension Protection Act (2006) as an individual who:

    (1) has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements set forth in regulations prescribed by the Secretary,

    (2) regularly performs appraisals for which the individual receives compensation, and

    (3) meets such other requirements as may be prescribed by the Secretary in regulations or other guidance.

    Regulations further indicate that an individual will not be treated as a qualified appraiser unless that individual

    (1) demonstrates verifiable education and experience in valuing the type of property subject to the appraisal, and

    (2) has not been prohibited from practicing before the Internal Revenue Service by the Secretary under § 330(c) of Title 31 of the United States Code at any time during the 3-year period ending on the date of the appraisal.

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  • What is “Fair Market Value”?

    Fair Market Value is most commonly defined per Internal Revenue Ruling 59-60, which stated,

    The amount at which the property would change hands between a willing buyer and willing seller, when the former is not under any compulsion to buy, and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts.

    Typically, Fair Market Value contemplates discounts to gross value to account for the lack of marketability and for a minority interest (where appropriate).  However, certain statutes and many buy-sell agreements change the definition of fair market value and they should be read carefully to understand their specific features.

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  • What does “Fair Value” mean?

    There is no unified definition of fair value.  One common definition is Financial Accounting Standards Board Accounting Standards Codification Topic 820 (also used for International Financial Reporting Standard 13):

    “…the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”

    This definition may be similar to definitions of fair value used in various state statutes for resolving dissenting minority shareholder disputes, but such definitions are not universal. 

    In Georgia (and many, but not all other states), for dissenting minority shareholder actions, fair value is defined as referenced in Section 13.01 of the Revised Model Business Corporation Act (the “Model Act”). The Model Act has been adopted by the American Bar Association’s (“ABA”) Committee on Corporate Laws and recommended by the ABA’s Section of Business Law.  Under the Model Act, fair value refers to the value of the corporation’s shares determined:

    1. Immediately preceding the corporate action to which the shareholder objects;
    2. Using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal; and
    3. Without discount for lack of marketability or minority status [except, if appropriate, in connection with certain amendments to contractual corporate governance features].
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  • What do the letters after Mike Blake’s name mean?

    CFA – CFA (Chartered Financial Analyst) Charter holder, conferred by the CFA Institute – holders of the CFA charter have passed three exams, requiring roughly 700 hours of study over 3 years, and have a minimum of 5 years experience in the finance industry as a practitioner.  CFA Charter holders are also bound to a rigorous and detailed code of ethics.

    ASA – Accredited Senior Appraiser, conferred by the American Society of Appraisers – holders of the ASA designation hold a four-year college or university degree, have passed 6 exams, taken roughly 115 hours of coursework in the practice and ethical standards of business valuation, have 5 years of experience in the business valuation field, and have successfully had an actual appraisal report pass peer review.  Continuing professional education requirements and a refresher course on professional standards and ethics are required every 5 years to maintain the designation.

    ABAR – Accredited in Business Appraisal Review, conferred by the National Association of Certified Valuators and Analysts (NACVA).   The ABAR is a specialized credential in the review of business appraisals performed by others appraisers.  The ABAR requires holding a four-year college or university degree, another valuation credential (such as the ASA), 40 hours of coursework, successful completion of a take-home sample appraisal review report that is peer reviewed, and passing an exam.

     

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  • What is an arpeggio?

    An arpeggio is a musical term that means a chord where the notes are played separately instead of together.  You can also think of an arpeggio as a scale where notes are skipped – thereby completing the musical sequence more quickly!  Some famous examples of arpeggios…

    I Will Survive – Gloria Gaynor

    Moonlight Sonata (1st Movement) – Ludvig von Beethoven

    Pinball Wizard – Elton John (1975)

     

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