The Alphabet Soup of Business Valuations

Wednesday January 15, 2025

Decoding Business Valuation Credentials: Choosing the Right Expert for Your Case

When family law cases involve dividing closely held business interests, the process can be intricate and emotionally charged. Business valuation plays a critical role in determining the value of these assets. But with so many different designations and credentials out there, how do you know which expert is right for your needs? Let’s break down the “alphabet soup” of business valuation credentials to help you make an informed decision.

Why Credentials Matter

Business valuation is a nuanced field requiring specialized knowledge, experience, and adherence to rigorous standards. Recognizing the differences between various certifications can ensure you hire a professional with the expertise to provide an accurate and defensible valuation. Here’s a closer look at some of the key designations in the United States and what they signify.

American Society of Appraisers (ASA)

Founded in 1952, the American Society of Appraisers (ASA) is the only organization offering credentials across all six appraisal disciplines, including business valuation. Their designations, Accredited Member (AM) and Accredited Senior Appraiser (ASA), are highly respected in the field.

To earn the ASA designation, candidates must:

  • Complete a series of valuation courses with examinations.
  • Demonstrate five years of business valuation experience (two years for AM).
  • Pass an exam on the Uniform Standards of Appraisal Practice (USPAP).
  • Submit a USPAP-compliant report for review.

ASA credential holders also commit to 100 hours of continuing education every five years, ensuring they stay current in their field. Notably, ASA members are the only valuation experts required to follow USPAP guidelines.

National Association of Certified Valuation Analysts (NACVA)

The Certified Valuation Analyst (CVA) designation, granted by NACVA, is another prominent credential. Candidates for this designation must:

  • Hold an active CPA license or a business degree.
  • Demonstrate substantial experience in business valuation.
  • Complete a proctored exam, a case study, or submit a recent valuation report.
  • Provide professional and business references.

Recertification requires 36 to 60 hours of continuing education every three years. While NACVA also supported the Certified Business Appraiser (CBA) designation in the past, it has since consolidated its offerings to focus on the CVA.

Association of International Certified Professional Accountants (AICPA)

The Accredited in Business Valuation (ABV) credential was introduced in 1998 and is now offered to both CPAs and qualified financial professionals. To earn the ABV credential, candidates must:

  • Hold a CPA license or a bachelor’s degree.
  • Pass the ABV exam (waived for ASA and CFA credential holders).
  • Meet education and experience requirements.

ABV holders are required to complete 60 hours of continuing professional development every three years, including at least four hours of ethics education.

Chartered Financial Analyst (CFA)

Primarily known as a credential for investment analysts, the CFA designation also covers valuation topics within its rigorous curriculum. Offered by the CFA Institute since 1963, the CFA program requires:

  • A bachelor’s degree.
  • Passing three levels of examinations.
  • 36 months of relevant work experience.

While continuing education isn’t mandatory, CFA Ccharterholders are encouraged to pursue ongoing professional development.

Certified Divorce Financial Analyst (CDFA)

Although not a When business valuation credential intersects with divorce proceedings, a Certified Divorce Financial Analyst (CDFA) can provide unique insights in divorce proceedings. Offered by the Institute for Divorce Financial Analysts (IDFA), the CDFA credential equips professionals to help clients understand the financial implications of divorce decisions.

Candidates for the CDFA designation must:

  • Have three to five years of relevant experience in financial planning, family law, investment advising, or related fields.
  • Pass an exam covering family law and financial topics.

To maintain their certification, CDFAs must complete 30 hours of divorce-related continuing education every two years.

Choosing the Right Professional

The right business valuation expert depends on the complexity of your case and the type of expertise required. Professionals with ASA credentials are often sought for their adherence to USPAP standards, while CVAs and ABVs bring specialized accounting and financial knowledge to the table. For cases involving investment portfolios, a CFA’s insights may be invaluable, and a CDFA can provide essential guidance in divorce-related financial matters.

Partner with Experts You Can Trust

At Gursey Schneider, we understand that family law cases require sensitivity, precision, and expertise. Our team is equipped with a range of credentials to handle even the most complex business valuation scenarios. Whether you’re navigating a divorce, partnership dispute, or other legal matter, we’re here to help you achieve equitable outcomes with confidence.

Contact us today to learn more about our business valuation services and how we can support your case.