M&A activities include business sales and purchases. The valuation expert would be brought into this kind of engagement if the client has received a purchase offer for his or her business or if the client is targeting a company for acquisition. Engagements in this field are time sensitive and, typically, a lot of work needs to be completed in a short period of time. It is a specialized field, and the expert should be well-qualified to efficiently perform the valuation within the prescribed time frame. M&A engagements may result in the hiring of an expert to value some of the following:
- Property, plant, and equipment
- Intangibles, that is, goodwill and patents
- Real estate
- Contracts
- Post-employment benefits
- Trademarks and trade names
- Contingencies
- Research and development
The valuation expert should be aware of the recent rulings related to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 805, Business Combinations, and 350, Intangibles—Goodwill and Other.
The leading referral sources for these transactions are business brokers, transactional attorneys, CPAs, and the business owners themselves. As with other sub-disciplines of BV, these engagements require specialized skills. It is not uncommon for valuation experts to refer this type of work to more experienced peers or collaborate as a group to gather the best resources. This would make it prudent for an expert to market his or her expertise to peers at association meetings.