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949.598.0986

Your Business Valuation and Asset Appraisal Experts
Your Business Valuation and Asset Appraisal Experts
Schedule Your Appointment Today
1-949-598-0986

Valuation vs appraisal

Our asset appraisals and business valuations meet the scrutiny of attorneys, accountants, banks and their clients, courts and the IRS.

Valuation vs Appraisal

Physical Assets are Appraised while Intangible Assets are Valued

valuation vs appraisal

The Business Appraisal Misnomer

While financial professionals use these terms interchangeably, there are differences. Technically speaking, the term "Business Appraisal", as commonly used, is a misnomer.

Business Valuation Components

Ongoing businesses or "Going Concerns", as they are officially termed, contain both tangible and intangible value including such intangible assets as: accounts receivable, branding, contracts receivable, customer deposits, customer lists, key employees, patents, recipes, special knowledge, trademarks, unique company name & reputation, and goodwill in general as well as other Intangible assets in addition to the tangible value of their physical assets.

The Business Valuation

Thus Business Valuations include both tangible and intangible value. Additionally, regarding Going Concerns, the value of their intangible assets (generally speaking) far outweighs the value of their tangible assets unless the business is insolvent, bordering on insolvency or is a holding company. In contrast, physical or tangible assets such as equipment, fixtures, furniture, jewelry, real estate, and other physical assets are appraised rather than valued.

The Asset Appraisal

When it comes to valuing businesses quite often some of the tangible assets may need to be appraised as part of a business valuation. Additionally, such tangible assets may need to be appraised for compliance with bank SBA regulations and for other purposes such as acquisitions, bankruptcy, divorce, partnership dissolutions, etc. when there is no intangible value or goodwill in a business or when there is no business at all.