Imagine you’re a company that’s about to buy another company. You think they’re worth $100 million. They think they’re worth $150 million. Who’s right?
No pressure. Only $50 million on the line.
Time to call a CPA with an ABV (Accredited in Business Valuation certification). Because this is some seriously tricky business. It takes someone who’s not only a wizard with financial statements, but is a real business expert, too. Which is exactly what makes a CPA stand out from the herd.
Valuation is so important to some companies that they keep valuation experts on staff at all times. They’re also a staple of midsize and large accounting firms. Valuation experts are crucial to business today, as companies put every deal under the microscope – even the ones that would have sailed through approval not so long ago.
What it really means
These days, valuation is practically a science. And with so much on the line for companies, it should be. You can’t leave this stuff to guesswork.
When you’ve earned your ABV, it means you’ve mastered the art and science of valuation. You know all the terminology, formulas, and different strategies for determining how valuable a business is – or isn’t. People expect you to set everyone else straight on the true value of a business, and be able to defend your conclusions when pressed. With your ABV, you’ll be able to do all that with confidence.
What you’ll do
The ABV is your ticket to the center of some of the most exciting parts of business: mergers and acquisitions, initial public offerings (IPOs), and other situations where you need to know what a business is worth. As a CPA, you’ll be a key part of the team that determines a business’ value. It’s a role that gives you a level of insider access that few people have, and there’s usually a lot on the line.
Where you’ll work
The large accounting firms all have dedicated valuation practices, which is where many CPAs put their ABV credentials to work. There are also a number of so-called “boutique” firms that specialize in valuation.
Is this for you?
Things you’ll need:
- A head for numbers. This is one of those CPA jobs that really does require you to be great with numbers. It just comes with the territory.
- Big-picture thinking. It’s equally as important to understand how businesses work – because the real value of a business can’t always be captured in numbers. You have to consider many other factors like marketability, supply and demand, risk, etc. If you think you have a sixth sense for business that goes way beyond numbers, valuation could be the gig for you.
Lifestyle you can expect:
- High intensity. Business valuation usually happens when there’s a lot on the line – and not a lot of time. Which makes it interesting and exciting – and a little intense. Can you handle that?
- Something new every day. Business valuation work takes you into all different types of businesses—so you always have to be ready to learn something new. As soon as you become an expert on one type of business, prepare to be whisked away somewhere else to become an expert on something entirely different.
How to make it happen
As with any science, it takes a lot of education and practice—and an exam, of course—to become a master of valuation. The ABV exam is no cakewalk – just like anything else worth doing, it takes some work. But once you have your ABV, a whole new world will open up in front of you. Kind of like getting your CPA.
Here’s what you’ll need to do to earn your ABV:
- Rack up some real-world, hands-on experience. It’s all spelled out in the application, but plan on working for a few years in the field before taking the ABV exam to get the required experience.
- Educate yourself. There are plenty of continuing education courses focused on valuation. In fact, a lot of colleges teach valuation courses. Attending conferences can help you build up the credits you need as well. If you’re already going down the path of valuation in your career, a lot of this will come naturally.
- Pass the ABV exam. In the end, the ABV exam is what it’s all about. It’s an 6-hour test, so pack a lunch. And it takes a lot of studying to be prepared. But you’ll see exactly how valuable it is in the end.
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