Calculation Engagement vs Valuation Engagement

Calculation Engagement vs Valuation Engagement.

In April, QuickRead featured some analysis of In Re: Marriage of Hagar in our Case Law—State section.  At issue in Hagar was the difference between a Calculation Engagement and a Valuation Engagement.  The Calculation Engagement the husband in the case presented was deemed unsuitable by a judge, in this particular case, because it the valuator admittedly didn’t “use judgment.”

NACVA member Charlotte Reith, CPA, CVA, CFF, of The Reith Company in Pasadena, CA wrote in to say she thought our analysis “is giving calculation engagements a bad name and is misleading.  A rule of thumb valuation [used in Hagar] is not a calculation of value.”  Is this case an anomaly? Were the facts in Hagar not relevant to drawing broad conclusions about the legitimacy of calculation engagements vis a vis a full valuation engagement?  Ms. Reith promises to write us more on the issue. Meanwhile, let us know what you think.

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Case Law—State in April was one of the most-read sections in that particular issue and that wasn’t an anomaly.  Case Law—State and Case Law—Federal both tend to be among our top-read sections each issue.  That makes us wonder:  How many of you are lawyers?   And how relevant and valuable are recent court precedents to work you do regularly in valuation and forensics?   Some readers have suggested that more and expanded information on case law from a larger sampling of states might be helpful.

Among the other QuickRead sections that regularly appear among our most-read are Forensic Accounting, Business Appraisal Practice (BAP) whitepapers, and links to NACVA HQ News and The Association News.   If you have ideas for additional topics on these or other subjects you’d like to see us cover, write us.