Part 2: AIRA Issues New Standards for Distressed Business Valuation In this second article on AIRA Standards, the author discusses unique issues valuing distressed companies. These include the standard of value used, the premise of value, the intended use of the valuation, and cost of capital. The author also discusses the use and level of acceptance of the Industry Risk Premium (IRP) in the bankruptcy/reorganization context. In 2004, The Association of Insolvency & Restructuring Advisors (AIRA) launched the Certification in Distressed Business Valuation (CDBV). The AIRA Board approved Standards for Distressed Business Valuation to improve the consistency and quality of…
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AIRA Issues New Standards for Distressed Business Valuation In 2004, The Association of Insolvency & Restructuring Advisors (AIRA) launched the Certification in Distressed Business Valuation (CDBV). Before the inception of the CDBV program, there was no professional designation to recognize those skilled and experienced in distressed business valuation work or expert valuation testimony in bankruptcy litigation. Given the increasing number of professionals who are performing business valuation engagements, the AIRA Board approved Standards for Distressed Business Valuation to improve the consistency and quality of practice among its members. The aforementioned standards became effective March 1, 2014. Michael Pakter, a NACVA…