Some practical reasons for obtaining a business valuation include the following:

General Corporate Purposes

• Obtaining external financing
• Bankruptcy and reorganization
• Benchmarking shareholder value
• Life insurance planning and funding
• Buy-sell and shareholder agreements

Tax and Financial Reporting

• To elect Subchapter S-corporation status
• Goodwill impairment studies for SFAS 142
• Employee stock options for SFAS 123R and IRC § 409A
• Intangible asset valuations and reasonable royalty determinations
• Closely-held securities for income, gift, and estate tax planning and compliance

M&A Transactions

• Financial restructuring and recapitalizations
• Divisions/subsidiaries for split-offs and split-ups
• Establish reasonable range of value for negotiating purchase price
• Allocation of lump-sum purchase price under SFAS 141/142 and IRC § 338/1060

Dispute Resolution and Litigation Support

• Tax-related controversies
• Partner/shareholder disputes
• Corporate securities litigation
• Damages/economic loss analysis