ABCs of Appraiser
all Appraisal Designations are Created Equal.
While professional appraisal credentials in real estate appraisal
have been around for decades, professional designation in
Businesses Appraisal is a more recent phenomenon. It’s
been less than thirty years since the Institute of Business
Appraisers (IBA) was formed and since the American Society
of Appraisers (ASA) officially recognized business valuation
as a separate appraisal discipline. Since that time a number
of other organizations, likely seeking to capitalize on the
emergence of BV as a fee-producing technical specialty and
hoping to siphon off some of the fee revenues to the troubled
Public Accounting profession, have jumped into the alphabet
soup of professional designations.
Credibility Counts. It’s certainly
true that not all credentialed appraisers are equally qualified,
and in a given case the lesser credentialed appraiser can
sometimes do as good a job as the one holding the more senior
designation. But in a world of experts, high quality credentials
mean high quality credibility, and in every case in every
trial, credibility carries the day. Further, it’s often
the quality of the credentials that gets the case settled
and avoids the costly trial.
CPAs Suddenly Become Appraisers. Most recently
into the melee with the ASA and IBA are the National Association
of Certified Business Analysts (NACVA) and the American Society
of Certified Public Accountants (AICPA), both of which created
alphabetic monikers (CVA & ABV) for their members.
Though there is certainly a lot of turf guarding in the industry,
it’s fair to say that the two most senior credentials,
and the most difficult to obtain are those awarded by the
American Society of Appraisers and the Institute of Business
Appraisers, Accredited Senior Appraiser (ASA) and Certified
Business Appraiser (CBA), respectively. But these guys are
rare commodities: only about 400 individuals are credentialed
as CBAs, and about 700 as ASAs, so they are not always easy
Experience Requirements Prove-up Skills.
Both the American Society of Appraisers and the Institute
of Business Appraisers are unique in that they require that
designation applicants have a minimum amount of actual hands-on
business appraisal experience, and require that applicants
submit a sample of their actual work product to a committee
of reviewers for approval. Both the ASA and the IBA require
each successful applicant must have completed 5 years of full-time
practice exclusively in the performance of business appraisals.
By contrast, NACVA has no requirement that the applicant have
ever performed an actual appraisal for a client, and the AICPA
only requires that the applicant have “involvement”
in ten business appraisals.
Some Written Exams are Easier. Both of the
professional appraisal societies and the other credentialing
entities require that applicants pass a written examination,
though the rigor of the examination is likely not equivalent
among the organizations. The IBA written examination is a
four-hour objective and case study test, proctored by the
IBA several times throughout the year.
The ASA conducts its proctored examination a little different
allowing any applicant who meets all of the requirements to
sit for the open group examination, or to take and pass four
examinations given at the end of their four main Appraisal
Principles courses. The pass rate for these exams has been
running about 50%. The AICPA recently developed a written
examination for its accountant members - applicants must be
CPAs to take the examination - the AICPA doesn’t announce
what the pass rate is for its examination. The process used
by NACVA is different from the rest: its examination is an
open-book take-home, mail-in exam and case study. We’re
not aware of any applicant who has failed the NACVA take-home
Summary. In a world where the nature of the
work product is so technical, the imprimatur of credibility
is the mantle of success. Your clients’ cases are best
placed in the hands of the most skilled and credentialed business
appraiser available — those recognized as Certified
Business Appraiser (CBA) and Accredited Senior Appraiser (ASA).
Both the IBA and ASA publish directories of their credentialed
members and maintain websites to assist in locating qualified
business appraisers. Both Mr. Eggers and Mr. Laversin are
credentialed CBA & ASA appraisers. They are two of what
is likely less than 100 U.S. appraisers who hold both of these
advanced professional designations, as well as CPAs.