What valuation standard most likely applies to you

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Reference no: EM132103328

Question - Forensic Valuation Issues

Assumptions: You are a CPA and you received a call from an attorney who wanted to engage you to provide valuation services to his client. This is a case involving ABC Manufacturing Company. ABC Corp is owned by three individuals, John, Paul and Bill, each owning 33 1/3 share of the company. John and Paul are passive investors and Bill is the operations manager. John and Paul do not like Bill and have accused him of dishonesty. John and Paul have decided that they want to take Bill out of the company by buying him out.
John and Paul do not know much about how ABC Corp operates. They want you to perform whatever work you need to, to estimate the value of the company so they can buy out Bill.

What valuation standard most likely applies to you in this matter, if any, and why?

What type of valuation engagement would you do if you accepted John and Paul's assignment? Explain.

If John and Paul wanted to meet, discuss and agree on a particular valuation approach and method, would you accept the engagement? If not, why not? If yes, under what conditions would you accept the engagement?

What standard of value would you follow if you decided to meet John and Paul's request? Explain.

What valuation method would you probably use in this matter, and why?

Under what circumstance would you need to calculate a capitalization rate or discount rate? Explain.

Length: Approximately 3 page.

Reference no: EM132103328

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