Valuing Professional Practices

Much has been written about appraising the closely held business enterprise. Many of these articles and treatises fill a large part of my library, and some of the texts are in their second edition. None, however, is as comprehensive as this monograph on the subject of valuing professional practices. Moreover, the basic fundamentals set forth in this book have application in valuing the non-professional business as well. The book is written for practitioners in North America as well as for those in other areas of the world. The concepts and the methods are the same in many countries and, although many court decisions may not readily cross borders, neither do many U.S. and Canadian court cases set precedent in jurisdictions where they were not originally tried. The author, early on in the book, points out that market value is distinct from fair market value, which assumes that both buyer and seller are apprised of all the factors influencing value. How often do we get set upon "comparable" transactions that do not represent fair market value? Another area that the author clarifies is the difference between commercial goodwill and personal goodwill. In the chapter on the valuation of partial interests the author provides the results of a 1989 survey of 50 business valuators from Canada and the United States with respect to the probable incidence of various ranges of combined marketability and minority interest discounts from rateable value which readers should find most helpful as a reference in establishing their own discounts.