Trusted Fair Market Value (FMV) Services

Fair market value is generally determined by analyzing the business or asset, its financial information, ownership characteristics, market conditions, and the purpose of the valuation. Business valuation professionals may consider income, market, and asset-based approaches, selecting methods appropriate to the engagement. The conclusion should reflect the relevant facts, assumptions, and valuation date rather than relying on a simple formula.

Fair market value is an opinion of value based on the price that could be exchanged between a willing buyer and willing seller, with neither being under compulsion and both having reasonable knowledge of relevant facts. For a closely held business interest, the analysis may consider financial performance, risks, ownership rights, marketability, and the specific purpose and valuation date.

Calculating the FMV of private company shares typically requires analyzing the company’s financial information, capital structure, ownership rights, comparable market evidence, and the difference between controlling and minority interests. Discounts or adjustments may be relevant depending on the facts and engagement purpose. A formal valuation can provide documented support when shares are being gifted, transferred, reported, or evaluated for an ESOP.

A company’s FMV is determined through a structured valuation analysis that considers its financial history, expected earnings, assets, liabilities, industry and market conditions, customer or business risks, and the purpose of the engagement. The valuator selects appropriate methods, reconciles the indications of value, and documents assumptions and conclusions in a report suitable for the intended business, tax, transaction, or judicial use.

Business owners, ESOP administrators, CPAs, tax firms, estate and trust attorneys, executors, trustees, and parties involved in transactions may need a formal FMV appraisal. Common purposes include gifting private company interests, estate administration, succession planning, partner buyouts, exit planning, divorce settlements, transaction analysis, tax filings, and judicial proceedings. The required scope depends on the purpose and intended users.

A valuation engagement commonly requires financial statements, tax returns, ownership and capitalization details, organizational information, business operations data, and context about the valuation purpose and date. Additional information may be relevant for ESOP, estate, gift, divorce, transaction, or judicial matters. The valuator identifies the documents needed for the specific assignment and evaluates the information for relevance and reliability.

Yes. Peridot Valuation provides formal business valuations for IRS and judicial purposes, including support related to gifting, death, divorce, estates, trusts, and tax returns. The report should be prepared for its stated purpose and address the relevant ownership interest, valuation date, assumptions, and supporting analysis. Clients should coordinate with their tax or legal advisors regarding filing and procedural requirements.

Yes. Peridot Valuation provides ESOP valuation services and has experience valuing both controlling and minority interests. The assignment may involve reviewing the company, ownership interest, financial information, and purpose of the valuation, then preparing analysis suited to the engagement. Peridot Valuation can also copy a previous valuator’s methodology when helping business owners change valuation firms for ESOP valuations.