Valuation applies income, market, and asset approaches to determine value at a specified date. Standards of value vary by state between fair market value and fair value, and treatment of goodwill differs substantially.
Personal goodwill is excluded in many states.
Alternative Names:
Marital Business Valuation|Divorce Business Appraisal
Why it Matters?
Personal goodwill exclusion is the largest valuation variable in professional practices, since value attributable to the individual's reputation and relationships is excluded from the marital estate in many states while enterprise goodwill is included, and the allocation between them frequently determines most of the value. Discounts for lack of marketability and control are also treated inconsistently, with several states rejecting them in divorce contexts.
Frequently Confused with
Related terms
Frequently asked questions
What is the largest valuation variable?
Are marketability discounts applied?
