Appraisal Review Services
Appraisal Review Services
Expert review and analysis of business valuation appraisals
What Is an Appraisal Review?
An appraisal review is a professional evaluation of an existing business valuation appraisal or report. A reviewer examines the appraiser’s methodology, data sources, assumptions, calculations, and conclusions to determine whether they are reasonable, supported, and consistent with valuation standards. Reviews range from limited desk reviews—focusing on methodology and reasonableness—to comprehensive detailed reviews that examine every aspect of the appraisal in depth.
Appraisal reviews serve several important purposes. They provide a second opinion when a client wants independent verification of a valuation. They identify potential errors, unsupported assumptions, or departures from professional standards that may affect the reliability of a valuation. They support litigation by providing critical analysis of opposing expert valuations. They assist auditors and boards of directors in evaluating whether third-party valuations are reasonable and defensible. And they help identify opportunities to improve valuation quality and process.
At Corporate Valuations, Inc., we have four decades of experience reviewing business valuations across a wide range of industries and valuation purposes. Our ASA-credentialed professionals conduct thorough, professional reviews grounded in established valuation standards and best practices. Whether you need a high-level reasonableness review or a detailed technical analysis, we can provide the expertise and objectivity you need.
When You Need an Appraisal Review
Second Opinion on Valuation
When you have received a valuation from another appraiser and want independent verification of the conclusions, an appraisal review by a qualified professional provides that second opinion. This is particularly valuable when valuations are for high-stakes purposes like acquisition negotiations, estate planning, or partnership dissolution, where the valuation significantly impacts financial outcomes.
Litigation Rebuttal Analysis
In litigation involving business valuation disputes, one party’s valuation expert may be challenged by the opposing party’s expert. When you receive an opposing appraisal, critical review and rebuttal analysis are essential. We examine the methodology, challenge unsupported assumptions, identify data errors, and articulate why the opposing valuation does not meet professional standards or support its conclusions.
Audit Requirements
When companies commission third-party valuations for financial reporting purposes (purchase price allocations, goodwill impairment testing, equity compensation valuations), auditors may request reviews to evaluate the reasonableness of the valuation and compliance with accounting standards. A qualified review by another professional appraiser strengthens audit confidence in the valuation.
Quality Control & Internal Review
Valuation firms and consulting groups may use external reviewers to evaluate work product for quality control purposes. We provide objective review services that evaluate internal valuations against professional standards and identify opportunities for improvement in methodology, documentation, and technical quality.
Types of Reviews We Perform
Desk Review
A desk review examines the valuation report for overall structure, methodology, and reasonableness of conclusions without conducting independent analysis or research. The reviewer assesses whether the appraiser followed appropriate methodology, whether assumptions appear reasonable, and whether conclusions flow logically from the analysis. A desk review is efficient and cost-effective for clients who want an initial assessment without commissioning a full independent valuation.
Detailed Review
A detailed review involves comprehensive examination of all aspects of the appraisal. We verify data sources, check calculations, examine underlying financial statements, research comparable transactions and market data, test assumptions, and independently evaluate the reasonableness of conclusions. A detailed review is more rigorous and time-intensive than a desk review but provides deep analysis of valuation quality and reliability.
Compliance Review
A compliance review focuses specifically on whether a valuation meets applicable professional standards and regulatory requirements (such as USPAP—Uniform Standards of Professional Appraisal Practice). This type of review is valuable when a valuation must comply with specific standards for legal, regulatory, or audit purposes. We examine the report for completeness, proper disclosures, and compliance with all relevant professional standards.
Litigation Rebuttal Analysis
In litigation contexts, we provide detailed rebuttal analyses that critically examine opposing valuations, identify weaknesses, challenge unsupported assumptions, and articulate why the opposing valuation does not meet professional standards. These analyses are designed to support cross-examination and demonstrate the weaknesses in opposing expert opinions.
What We Evaluate in an Appraisal Review
Business & Industry Analysis
We examine whether the appraiser conducted adequate analysis of the business being valued and the industry in which it operates. Are key business drivers, competitive position, and market trends properly analyzed? Is the analysis current and accurate, or based on outdated information?
Financial Data & Analysis
We verify that financial statements used in the valuation are accurate and from reliable sources. We check historical financial analysis, trend analysis, and whether the appraiser adjusted financials for non-recurring items or extraordinary adjustments. Are adjustments supported and appropriate?
Valuation Methodology
We evaluate whether the appraiser selected appropriate valuation approaches (income approach, market approach, asset approach) and whether those methodologies are properly applied. Are methods consistent with industry practice? Are alternative methods appropriately considered or rejected?
Assumptions & Adjustments
We examine key assumptions such as revenue growth rates, discount rates, terminal growth rates, and market comparables. Are assumptions supported by data and market evidence? Are they disclosed and explained? Are adjustments to comparable company data or transactions properly justified?
Discount & Capitalization Analysis
We evaluate the appraiser’s analysis of discount rates, capitalization rates, and valuation discounts (lack of control, lack of marketability, size discounts, etc.). Are these rates supported by market evidence? Are discounts properly calculated and applied?
USPAP & Professional Standards Compliance
We assess whether the valuation complies with the Uniform Standards of Professional Appraisal Practice (USPAP) and other applicable professional standards. Are all required disclosures made? Is the report complete and properly documented?
Our Review Process
Discuss Your Valuation Needs
Call 503-235-7777 or request a fee estimate online. We respond within 48 hours.
We approach each appraisal review with systematic rigor and professional objectivity. We begin by thoroughly examining the appraiser’s report and understanding the assignment objectives, valuation date, and conclusions. We then conduct appropriate-level analysis based on the scope of review requested—from desk review to detailed technical analysis. We verify data, research market comparables, test assumptions, and evaluate whether conclusions are reasonable and supported.
We prepare detailed review reports that document our findings, identify any issues or concerns, explain our reasoning, and present clear conclusions about the quality and reliability of the appraisal. Reports are prepared for use by clients, attorneys, auditors, or courts, and we tailor our presentation to the intended audience. We maintain strict objectivity and professional independence, providing honest assessment whether the original valuation is strong or has identified weaknesses.
With over 40 years of experience and more than 1,000 valuations completed, our team has the deep expertise to evaluate business valuations across industries, analyze complex valuation questions, and provide credible, professional review opinions that clients and stakeholders can rely on.
IRS Audit Defense Reviews
IRS challenges to valuation opinions present significant risk to taxpayers and their advisors. Our IRS audit defense reviews provide comprehensive examination of valuations that have been questioned by Revenue Agents, Appeals Officers, or in litigation. We assess compliance with Revenue Ruling 59-60, identify methodological vulnerabilities, and prepare detailed rebuttals grounded in business valuation standards and tax precedent.
Estate & Gift Tax Valuations
Our review process examines the adequacy of estate and gift tax valuations in anticipation of or response to IRS examination. We ensure valuations reflect fair market value determinations consistent with Treasury regulations and applicable case law, particularly for non-operating assets, minority interests, and restricted securities.
Revenue Ruling 59-60 Compliance
Comprehensive assessment of all eight Revenue Ruling 59-60 factors: nature of business, economic outlook, industry conditions, company financial performance, dividend-paying capacity, intangible assets and goodwill, prior transactions, and valuation methodology application.
Vulnerability Identification
Proactive identification of audit vulnerabilities and exposure areas before IRS examination. Our analysis positions taxpayers and their advisors to strengthen valuation positions, gather supporting documentation, and develop defensible rebuttal strategies grounded in authoritative precedent.
IRS Examination Support
Expert support throughout the examination process, including detailed response memoranda, reconciliation analysis, and expert testimony development. Our credentials and track record establish credibility with Revenue Agents and Appeals Officers.
ESOP Adequacy Reviews
Employee Stock Ownership Plans require annual independent valuations to establish fair market value for plan accounting, contribution determinations, and regulatory compliance. Our ESOP adequacy reviews ensure valuations meet Department of Labor and ERISA requirements while supporting trustees in their fiduciary responsibilities and documenting processes that withstand audit scrutiny.
DOL/ERISA Compliance
Rigorous verification that valuations comply with Department of Labor regulations, ERISA fiduciary standards, and IRS requirements for ESOPs. We assess whether prior valuations adequately supported contribution formulas, distribution valuations, and annual plan accounting.
Annual Adequacy Assessments
Year-over-year valuation review ensuring current annual valuations reflect material changes in company performance, capital structure, and market conditions. We identify when valuation approaches or discount assumptions require adjustment to maintain defensibility.
Trustee Fiduciary Support
Comprehensive documentation supporting trustee valuation determination and fiduciary decision-making. Our analyses provide trustees and plan sponsors with detailed valuation reasonableness assessments and documented processes demonstrating prudent engagement with independent valuers.
DOL Investigation Preparation
When the Department of Labor initiates investigation of ESOP valuation practices, our expert review provides analysis supporting the defensibility of valuation determinations and documentation of trustee compliance with ERISA standards and fiduciary duties.
Common Errors We Identify
In reviewing valuations across diverse industries and transaction types, we regularly identify material errors and methodological deficiencies that significantly impact valuation conclusions. These errors often reflect incomplete analysis, insufficient documentation, or misapplication of valuation principles—issues that may not be apparent to non-specialist reviewers but become critical during litigation, regulatory examination, or audit challenge.
Discount Rate Derivation Errors
- Build-up method deficiencies: Inconsistent equity risk premiums, unsupported size premiums, mischaracterized risk categories, failure to document component selection and adjustment rationale
- CAPM misapplication: Unstandardized beta calculations, incorrect peer group selection, improperly adjusted betas, failure to reconcile cost of equity with company-specific risks
- Improper weighting: Arbitrary blending of cost of equity and debt without documented rationale, failure to reflect actual or optimal capital structure
Discount & Premium Application
- Unsupported marketability discounts: Generic discount application without company-specific analysis, failure to document supporting empirical data, double-counting with other adjustments
- Control premium inconsistencies: Mismatched assumptions between comparable transactions and operating approaches, failure to adjust for synergies or strategic buyer characteristics
- Adjustment stacking: Multiple overlapping discounts applied simultaneously without justification or reconciliation across valuation approaches
Comparable Selection Bias
- Narrow peer groups: Insufficient comparable companies selected to support multiples, cherry-picked comparables to achieve predetermined conclusion
- Size mismatch: Failure to adjust multiples for differences in revenue, EBITDA, or market capitalization between subject company and comparables
- Geographic/industry misalignment: Comparables operating in materially different markets or industry segments without appropriate adjustment factors
- Missing quality assessment: Failure to evaluate data quality or recent material changes in comparable companies
Normalization Failures
- Revenue normalization deficiencies: Failure to adjust for one-time contracts, discontinued revenue, contract renegotiations, or customer concentration changes
- Earnings adjustment errors: Inadequately supported add-backs for owner compensation, related-party transactions, or extraordinary items
- Missing adjustments: Failure to normalize for management changes, operational restructuring, or strategic initiatives affecting earnings capacity
- Documentation gaps: Unsupported normalization assumptions without reference to historical trends or market conditions
Three-Approach Deficiency
- Single-method reliance: Exclusive reliance on one valuation approach (typically market or income) without analysis of alternative methodologies
- Incomplete approach application: Partial analysis of multiple approaches without meaningful reconciliation or weighting rationale
- Missing approach justification: Rejection of applicable approaches without documented analysis of why approach is inapplicable to subject company
- No sensitivity analysis: Absence of reasonableness testing across different approaches or assumption variations
Mathematical & Computational Errors
- Calculation mistakes: Spreadsheet errors in discount rate calculations, cash flow projections, or multiple applications
- Projection errors: Inconsistent growth rate assumptions, misaligned revenue and expense projections, unrealistic terminal value assumptions
- Formula misapplication: Incorrect use of valuation formulas (NPV, perpetuity growth, capitalization rates)
- Conversion errors: Failure to properly convert between different valuation bases (enterprise value, equity value, per share value)
Fair Value Reporting Reviews
Fair value measurement for financial reporting purposes requires rigorous application of FASB Accounting Standards Codification topics addressing specific transaction and reporting contexts. Our fair value reporting reviews ensure valuations support accurate financial statement presentation, comply with relevant accounting standards, and provide auditors with the documentation and analysis necessary for audit comfort and compliance review.
ASC 805 Purchase Price Allocation
Review of business acquisition purchase price allocations to verify fair value measurements for all acquired assets and liabilities, including intangible assets, contingent consideration, and goodwill. Our analysis ensures allocations reflect independent fair value assessments and provide proper support for deferred tax positions and audit compliance documentation.
ASC 350 Goodwill Impairment Testing
Expert review of annual goodwill impairment analyses, including evaluation of fair value assessments for reporting units, reasonableness of valuation assumptions, and adequacy of documentation supporting carry-forward of goodwill balances. We assess whether impairment testing reflects current market conditions and company performance.
ASC 718 Equity Compensation
Review of share-based compensation fair value measurements for stock options, restricted stock units, and other equity awards granted to employees and service providers. Our analysis ensures proper application of valuation models, appropriate volatility assumptions, and compliance with ASC 718 measurement and disclosure requirements for financial reporting.
ASC 820 Fair Value Hierarchy Compliance
Comprehensive review of fair value measurements across all accounting applications to ensure proper classification within the three-level fair value hierarchy (Level 1 quoted prices, Level 2 observable inputs, Level 3 unobservable inputs) and appropriate disclosure in financial statements. We verify that valuation approaches and inputs align with hierarchy level classifications.
Get a Professional Appraisal Review
Whether you need a second opinion on a valuation, rebuttal analysis for litigation, or a quality assurance review, our experienced appraisers can provide the expert analysis you need. Contact us to discuss your appraisal review requirements.