Determining Date Of Valuation And Subsequent Implications

Current Issues in Closely Held Businesses Series: Part 6

In any appraisal, whether conducted as a result of a breach of fiduciary duty or oppression, the date of valuation has to be established. In fact, after establishing the definition of "fair value" to apply, the determination of the date of value is of critical importance, as valuation results can vary substantially depending upon the date chosen. Independent of the operations and fluctuations in earnings, over time, the cost of capital changes, projections of future revenue fluctuate, comparable company transactions and pricing change, customer and supplier vagaries arise, and markets expand or contract.

Alternative Dates