Page 34 - Business Valuation for Estates & Gift Taxes

Finally, in order not to detract from the valuation report’s credibility, the valuation analyst must be dili-
gent about the smaller details like syntax, punctuation, proper calculations, and so on. Common or care-
less mistakes, although minor, may have no impact, or immaterial impact, on the conclusions reached,
but can have significant impact on the readers of the report and their perception of the report’s accuracy.
Common examples of where errors may be found include, but are not limited to, (a) matching the dis-
count or capitalization rate to the incorrect economic income measure, (b) arithmetic errors, and (c) use
of inconsistent rounding conventions. Finally, it is also important make sure the overall report is reason-
able and tells a consistent story from beginning to end. An objective review from someone not exposed
to the details or day-to-day preparation of the report is often an effective way to assess how the report
will read to intended users. Obviously this review must be conducted by someone who is permitted to
review client information without jeopardizing confidentiality.

When drafting the report’s narrative, consider using the following composition guidelines:

 Appropriate level of formality in the report

 Gender-neutral references

 Correct punctuation

 Active voice

 Consistent verb tenses

 Coherent prose in the valuation report (to clearly link related ideas and distinguish from unrelat-
ed ideas)

Conclusion

The detailed valuation report is the most important evidential support for conclusions of value submitted
with an estate and gift tax return. Therefore, commensurate time and effort should be expended when
preparing this report.

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