Microsoft Word peachtree case study
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| 2.3.3 The Asset Based Approach The Asset Based Approach may also be referred to as the cost approach and is based primarily on the fair market value of the balance sheet (Including all assets and liabilities) of the company being valued. Each piece of the company is valued separately, and then added together to arrive at the total value of the company. The costs of duplicating or replacing the individual components of the business are determined item by item, using special appraisal professionals as needed. This method is generally only suitable for the valuation of interests that have the benefit of control i.e., the interest being valued has the ability and authority to make decisions regarding the disposition or acquisition of assets and liabilities. Perhaps, most importantly, one must recognize that this approach has some limitations when there are intangible assets present which are part of the interest being valued. In this case, the Asset Based Approach must be modified and amended with other acceptable methods of determining value such as Internal Revenue Service Revenue Ruling 68‐609 (generally used in determining the fair market value of intangible assets. Download 0.84 Mb. Share with your friends:
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