Case 1:20-cv-00393-LO-TCB Document 1093-5 Filed 02/25/22 Page 1 of 4 PageID# 29977
`Case 1:20-cv-00393-LO-TCB Document 1093-5 Filed 02/25/22 Page 1 of 4 PagelD# 29977
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`EXHIBIT 5
`EXHIBIT 5
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`Copyright © 2015, American Institute of Certified Public Accountants, Inc. All Rights Re...
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`Case 1:20-cv-00393-LO-TCB Document 1093-5 Filed 02/25/22 Page 2 of 4 PageID# 29978
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`Valuation Services
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`VS Section
`STATEMENTS ON STANDARDS FOR VALUATION SERVICES
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`VS Section 100
`Valuation of a Business, Business Ownership Interest, Security, or
`Intangible Asset
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`Source: Statement on Standards for Valuation Services No. 1
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`June 2007
`Foreword
`Why Issued
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`Valuations of businesses, business ownership interests, securities, or intangible assets (hereinafter
`collectively referred to in this Foreword as business valuations) may be performed for a wide variety of
`purposes including the following:
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`1. Transactions (or potential transactions), such as acquisitions, mergers, leveraged buyouts,
`initial public offerings, employee stock ownership plans and other share based plans, partner
`and shareholder buy-ins or buyouts, and stock redemptions
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`2. Litigation (or pending litigation) relating to matters such as marital dissolution, bankruptcy,
`contractual disputes, owner disputes, dissenting shareholder and minority ownership
`oppression cases, and employment and intellectual property disputes
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`3. Compliance-oriented engagements, including (a) financial reporting and (b) tax matters such as
`corporate reorganizations; S corporation conversions; income, estate, and gift tax compliance;
`purchase price allocations; and charitable contributions
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`4. Planning oriented engagements for income tax, estate tax, gift tax, mergers and acquisitions,
`and personal financial planning
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`In recent years, the need for business valuations has increased significantly. Performing an
`engagement to estimate value involves special knowledge and skill.
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`Given the increasing number of members of the AICPA who are performing business valuation
`engagements or some aspect thereof, the AICPA Consulting Services Executive Committee has written
`this standard to improve the consistency and quality of practice among AICPA members performing
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`4/13/2015
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`interest under the income approach, the value of any non-operating assets, non-operating
`liabilities, or excess or deficient operating assets may or may not be used to adjust the value of
`the operating entity depending on the valuation analyst’s assessment of the influence exercisable
`by the non-controlling interest. In the asset-based or cost approach, it may not be necessary to
`separately consider non-operating assets, non-operating liabilities, or excess or deficient operating
`assets.
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`Conclusion of Value
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`.42
`In arriving at a conclusion of value, the valuation analyst should
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`a. correlate and reconcile the results obtained under the different approaches and methods
`used.
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`b. assess the reliability of the results under the different approaches and methods using the
`information gathered during the valuation engagement.
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`c. determine, based on items a and b, whether the conclusion of value should reflect
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`i.
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`the results of one valuation approach and method, or
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`ii. a combination of the results of more than one valuation approach and method.
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`Subsequent Events
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`.43
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`The valuation date is the specific date at which the valuation analyst estimates the value of the
`subject interest and concludes on his or her estimation of value. Generally, the valuation analyst
`should consider only circumstances existing at the valuation date and events occurring up to the
`valuation date. An event that could affect the value may occur subsequent to the valuation date;
`such an occurrence is referred to as a subsequent event. Subsequent events are indicative of
`conditions that were not known or knowable at the valuation date, including conditions that arose
`subsequent to the valuation date. The valuation would not be updated to reflect those events or
`conditions. Moreover, the valuation report would typically not include a discussion of those events or
`conditions because a valuation is performed as of a point in time—the valuation date—and the
`events described in this subparagraph, occurring subsequent to that date, are not relevant to the
`value determined as of that date. In situations in which a valuation is meaningful to the intended
`user beyond the valuation date, the events may be of such nature and significance as to warrant
`disclosure (at the option of the valuation analyst) in a separate section of the report in order to keep
`users informed (see paragraphs .52p, .71r, and .74). Such disclosure should clearly indicate that
`information regarding the events is provided for informational purposes only and does not affect the
`determination of value as of the specified valuation date.
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`Documentation
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`.44
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`Documentation is the principal record of information obtained and analyzed, procedures performed,
`valuation approaches and methods considered and used, and the conclusion of value. The quantity,
`type, and content of documentation are matters of the valuation analyst’s professional judgment.
`Documentation may include the following:
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` Information gathered and analyzed to obtain an understanding of matters that may affect
`the value of the subject interest (paragraphs .25–.30)
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` Assumptions and limiting conditions (paragraph .18)
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` Any restriction or limitation on the scope of the valuation analyst’s work or the data available
`for analysis (paragraph .19)
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` Basis for using any valuation assumption during the valuation engagement
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` Valuation approaches and methods considered
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` Valuation approaches and methods used including the rationale and support for their use
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` If applicable, information relating to subsequent events considered by the valuation analyst
`(paragraph .43)
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` For any rule of thumb used in the valuation, source(s) of data used, and how the rule of
`thumb was applied (paragraph .39)
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` Other documentation considered relevant to the engagement by the valuation analyst
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`.45
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`The valuation analyst should retain the documentation for a period of time sufficient to meet the
`needs of applicable legal, regulatory, or other professional requirements for records retention.
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`Calculation Engagement
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`.46
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`In performing a calculation engagement, the valuation analyst should consider, at a minimum, the
`following:
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`a.
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`b.
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`Identity of the client
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`Identity of the subject interest
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`c. Whether or not a business interest has ownership control characteristics and its degree of
`marketability
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`d. Purpose and intended use of the calculated value
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`e.
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`Intended users of the report and the limitations on its use
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`f. Valuation date
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