In our previous article “What’s a CBV (Chartered Business Valuator)”, we explored what a CBV does and the types of engagements in which their expertise may be sought. In this article, we will explore the beginning of a valuation engagement, and the common questions that clients often have.Our hypothetical scenario looks at a small business owner who has been approached by a potential buyer with an interest in acquiring the business through a purchase of shares. 


The Seller, owner of TargetCo (Target), a family-owned and managed business, has been approached by a large national competitor, BuyerCo (Buyer), who has offered to buy all of Target’s shares for $2 million. Not knowing if this is a good offer, Seller asks CPA, Target’s long-time accountant, if the offer should be accepted. CPA responds, “That’s a very good question. Unfortunately, I barely passed the requirements for finance when I wrote my final exams in 2010. Let me arrange a meeting with my former colleague, who is now a CBV, and has the necessary qualifications and experience to advise you on the transaction.”

The following is part of the meeting held between Seller and CBV on January 21, 2022

Seller: “Now that I’ve given you a background of Target and recent events, how will your services add value to a potential transaction with Buyer?”

CBV: “The scope of our work will involve us getting a complete understanding of Target, including its operating and financial history, its industry, and the company’s future prospects. This information will be integral to our review and analysis, in order to provide a calculation of the fair market value of Target’s shares. Our findings will be presented in a Valuation Report that can be used in negotiating the selling price of Target.”

Seller: “What is a Valuation Report, exactly?”

CBV: “A Valuation Report will be the deliverable product that we will prepare for you. It will contain our conclusion on the value of Target’s shares, including a summary of our calculations. After we go through the initial discussion of your business, its industry and the potential transaction, we can discuss and agree on the type of Valuation Report that will be appropriate for your requirements. There are generally three types of Valuation Reports: A Calculation, an Estimate, or a Comprehensive.”

“Any of the three reports noted above can be used as an Advisory Report. An Advisory Report can be helpful in instances where we may be retained by a seller or a buyer who is interested in a conclusion of value for a business, as well as assistance with the negotiation of the purchase price.”

Seller: “I think what I’m looking for is a Valuation Report. Can you tell me why there are three different types of Valuation Reports?”

CBV: “It is similar to how a CPA can provide an audit of financial statements, a review, or a compilation. These differ in the amount of work and level of assurance provided. An audit provides the highest level of assurance, followed by a review, and then a compilation, which provides no assurance.

“In a Calculation Valuation Report, our conclusion on the value of Target’s shares will be based on a limited review and analysis of relevant information, such as financial statements and corporate tax returns, with minimal corroboration of the information provided.”

“For an Estimate Valuation Report, we will perform additional review and analysis of relevant information, as well as further corroboration on the information provided.”

“Finally, in a Comprehensive Valuation Report, our conclusion will be based on highly detailed review and analysis of the company, the industry in which it operates, as well as other relevant factors and information provided.”

Seller: “Ok so, let’s say we agree on a Calculation Valuation Report for now. Will your conclusion on the value of Target’s shares be similar to the price that Buyer will pay for the shares?”

CBV: “Well, that’s possible, but it is more likely that it will be used as a starting point for your negotiations with Buyer. It will also provide some clarity on whether the $2 million offer price is reasonable. If you and Buyer are unable to come to terms on an agreement, you may consider allowing Buyer to engage another CBV to prepare and arrive at an independent conclusion on the value of Target’s shares, and then continue the negotiations with information from the reports of each valuator.”

Seller: “Ok I think I have a better idea now of the benefit of engaging a CBV in a purchase or sale transaction. I’ve previously read a Valuation Report that was prepared for a friend’s restaurant and noticed that the value conclusion corresponded to a particular Valuation Date. What is the Valuation Date and why does it matter?”

CBV: “The Valuation Date is the specific point in time at which our conclusion of value of Target’s shares will apply. You mentioned that Buyer is looking to purchase your shares on May 15th, 2022, they will likely want to see a valuation that incorporates your most recent financial information as close to that date as possible.”

Seller: “Ok, I’m convinced, how do we get started CBV?”

CBV: “Let’s arrange a follow-up call later this week to discuss our quote and draft an engagement letter”.

GG Comments

If you or your client would like to know how a CBV can be of assistance, please feel free to reach out to Grewal Guyatt LLP. Our team of business valuators and litigation support experts are ready to assist with any of the services outlined above, and more.


Jan Concepcion

Jan Concepcion


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Suhail Patel

Suhail Patel


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