CBV Level 1 - Valuation Report Exam Questions And Answers

- Current date - Name/address of client - Name/address of CBV - Type of report and level of assurance provided - Business interest being valued - Valuation date - Purpose of report - The definition of FMV used - Value does not equal price (notional vs. open market) - Prepared in accordance with CICBV Standards - Report and analyses must be considered as a whole - That this is a DRAFT - ANS What should the Introduction section of a Valuation Report include? - Name - Date founded - Corporate structure - Shareholders - Products sold - Main customers (economic dependence?) - Main suppliers (" ") - Labour force Provide sufficient detail here that the reader will understand the following section (Valuation Approach) - ANS What should the Company Overview section of a Valuation Report include? - Assessment of whether business is a going concern - If yes, income based approach appropriate - Assessment of whether historical = future earnings - If yes, capitalized approach appropriate - If no, discounted cash flow approach appropriate - If capitalized, assessment of whether depreciation = SCR - If yes, Capitalized Earnings - If no, Capitalized Cash Flow Whether report is to be prepared on a debt-free (unlevered) or debt-included (levered) basis - this is typically provided by the question - ANS What should the Valuation Approach section of a Valuation Report include? - An overview of the methodology used (CCF, CE, DCF) - Make sure to refer to Exhibits where calculations are performed - ANS What should the Valuation Methodology section of a Valuation Report include? - Explicit conclusion related to any of the "required"s - Typically En Bloc FMV and Goodwill - Reference to Valuation Methodology section to show this is how value was determined - ANS What should the Valuation Conclusion section of a Valuation Report include?