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Financial Statement of Valuation

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FINANCIAL STATEMENT OF VALUATION

Report Number:    Effective Date of Valuation:

Parties and Contacts

Appraiser Contact:    License / Certification No.:

Purpose and Intended Use

Purpose of Valuation:

Identification of Asset(s) / Interest

Asset Type:

Standard and Basis of Value

Select the standard(s) of value applied in this report (check all that apply):

Fair Market Value    Investment Value    Fair Value    Other:

Scope of Work and Sources

Assumptions, Limiting Conditions, and Representations

The opinions of value expressed in this Financial Statement of Valuation are subject to the assumptions and limiting conditions set forth below. The appraiser certifies that the statements and opinions are made in conformity with customary valuation standards and represent the appraiser's unbiased professional judgment. The following are material assumptions and limiting conditions:

Valuation Approaches, Data and Calculations

Indicate which approaches were applied and provide supporting amounts or narrative for each approach. Attach supporting schedules as exhibits when required.

Conclusion by Market Approach: $

Conclusion by Income Approach: $

Conclusion by Cost Approach: $

Reconciliation and Final Value Conclusion

The appraiser reconciles the results of the valuation approaches to arrive at a final estimate of value. The reconciliation considers the relevance and reliability of data, the reasonableness of assumptions, and the intended use of the valuation.

Final Value Conclusion (expressed in lawful currency): $

Fees, Payment and Distribution

Fee for Preparation of Report: $

Payment Terms:

Accepted Payment Methods: Check    Wire Transfer    Credit Card    Other:

Confidentiality and Use Restrictions

Certification of Appraiser

I certify that, to the best of my knowledge and belief, the statements in this report are true and the analyses and opinions expressed are my unbiased professional analyses, opinions and conclusions. The appraiser further certifies that no undisclosed interest or contingent interest exists that could affect the valuation and that compensation is not contingent upon any predetermined value or a stipulated outcome.

Appraiser Name:

By:

Date:

Client Acknowledgment

By signing below, the Client acknowledges receipt of this Financial Statement of Valuation, confirms the accuracy of information provided for the valuation to the best of the Client's knowledge, and accepts the stated limitations and conditions.

Client Name:

By:

Date:

Exhibits and Attachments

The appraiser's file, including data, analyses, and work papers used in preparing this valuation, shall be maintained in accordance with professional practice and is available for review under mutually agreed terms.

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What the Financial Statement of Valuation Is and When it Applies

A Financial Statement of Valuation is a formal report that establishes an estimated dollar value for a business, asset, real property interest, or financial holding at a specific valuation date. It typically summarizes the valuation purpose, methods used (market, income, cost approaches), supporting schedules, and professional conclusions. Organizations use it for lending, mergers and acquisitions, tax reporting, estate settlement, litigation support, and internal accounting. The document should state assumptions, limitations, effective date, and the preparer’s qualifications to provide a defensible opinion of value.

Why a Clear Valuation Statement Matters

A well-prepared Financial Statement of Valuation creates a documented basis for decisions and regulatory reporting, reduces disputes by stating assumptions, and supports compliance with lender, tax, or court requirements.

Why a Clear Valuation Statement Matters

Typical Users and Signers

Different stakeholders rely on valuation statements depending on the transaction or regulatory need.

  • Lenders and underwriters who need independent value evidence for credit decisions and collateral assessments.
  • Corporate finance, buyers, and sellers during M&A and capital-raising activities to set transaction terms.
  • Attorneys, courts, and tax advisors who use valuations for litigation exhibits, estate administration, or tax controversy.

The preparer should tailor scope and disclosures to the intended users and regulatory context.

Who Typically Prepares and Signs It

Valuation Specialist

Certified appraisers or accredited valuation analysts with documented methodological statements prepare the report, sign it, and explain assumptions; their credentials and independence affect admissibility and lender acceptance.

Chief Financial Officer

The company CFO or designated officer commonly reviews, approves, and signs internal valuation statements used for financial reporting, tax elections, or board decisions; signer authority should be clear on the cover page.

Key Components of a Professional Valuation Statement

A consistent structure improves clarity and defensibility. The following items are standard components to include in nearly all valuation statements.

Executive Summary

One-page synopsis of purpose, conclusion of value, effective date, summary of methods used, and a concise statement of key assumptions and limitations that frame the opinion.

Valuation Approach

Description of the chosen approach(es)—market, income, or cost—including formulas, discount rates, capitalization methods, comparable selection, and rationale for method selection.

Asset Schedule

Detailed list of assets and liabilities valued, identification numbers, physical descriptions, and any encumbrances or liens that materially affect value.

Market Analysis

Relevant market data, comparable sales or transactions, economic indicators, and analysis of supply-demand factors that influence the subject asset’s fair market value.

Income Forecasts

Projected revenues and expenses, growth assumptions, and sensitivity analysis used for income-based valuations, with clear year-by-year figures and supporting assumptions.

Assumptions and Limitations

Clear list of legal, factual, and hypothetical assumptions, known limitations, and any conditions that could materially change the valuation if they prove incorrect.

Step-by-Step: Completing a Valuation Statement

Follow these high-level steps to assemble a defensible Financial Statement of Valuation.

  • 01
    Gather Documents: Collect financials, contracts, title reports, and comparables.
  • 02
    Choose Method: Select market, income, or cost and justify choice.
  • 03
    Draft Schedules: Populate asset lists, income projections, and supporting calculations.
  • 04
    Review and Sign: Independent reviewer checks assumptions; authorized signer signs.

Configuring an Online Workflow for the Valuation Report

When using an eSubmission system, configure fields and authentication to match legal and audit requirements.

Field Configuration
Effective Date field Required; MM/DD/YYYY format; auto-validate date range.
Signature Block Required; signer name, title, date fields; capture IP and timestamp.
Supporting Attachments Allow PDF and DOCX uploads; restrict file size and require labels.
Signer Authentication Use email link or SMS code; enable stronger auth where required.

Typical eSubmission and Review Flow

A clear electronic workflow speeds delivery and preserves an audit trail; the following sequence is common.

  • Upload Document: Submit the draft valuation and attach schedules.
  • Assign Signers: Designate preparer, reviewer, and client signers in order.
  • Authenticate Signers: Use email confirmation or two-factor authentication.
  • Complete and Archive: Capture signatures, timestamp, and store final PDF with audit log.

Technical and Integration Considerations

Confirm the platform supports required file types, signer authentication, and audit logs before eSubmission.

  • File Formats: PDF and DOCX support required
  • Integrations: Connectors for NetSuite, Salesforce, and Google Workspace
  • Security: AES-256 at rest; TLS 1.2/1.3 in transit

Ensure the chosen provider can export signed PDFs, retain an immutable audit trail, and meet any industry-specific compliance (for example HIPAA BAA requirements) before finalizing the workflow.

Security and Compliance Checklist

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
Audit Trail: Timestamp, IP, and action log retained
Access Controls: Role-based permissions and SSO
HIPAA Support: BAA available for PHI workflows
21 CFR Part 11: Compliant options for regulated records
Certifications: SOC 2 Type II and ISO 27001 options

Common Timing and Deadline Considerations

Valuation timing affects which comparables and data are relevant and may be constrained by transaction or filing deadlines.

Valuation Effective Date:

Set the exact MM/DD/YYYY date that determines market data and assumptions.

Lender Submission:

Submit within lender-mandated window; often tied to financing commitment expiry.

Tax Reporting:

Align with tax filing deadlines if valuation affects tax elections or basis adjustments.

Estate Filings:

Coordinate valuation with estate tax return schedules and probate timelines.

Litigation Deadlines:

Provide expert reports according to court scheduling orders and disclosure deadlines.

Key Processing Milestones

Track these sequential milestones from engagement to archived report to avoid last-minute compliance issues.

01

Engagement Request

Client issues engagement letter and defines scope of work and effective date.

02

Data Collection

Gather financials, titles, contracts, and comparable data required for analysis.

03

Draft Report

Prepare draft with schedules and internal review for assumptions and calculations.

04

Final Delivery

Obtain necessary signatures, notarization if required, and archive final signed PDF.

Practical Tips for Accurate and Efficient Completion

Apply consistent standards and simple quality controls to reduce rework and legal exposure.

Standardize Templates
Use a consistent template with labeled schedules to reduce omissions and speed reviewer reconciliation; include a cover page with scope and limitations.
Validate Data
Cross-check financial inputs against audited statements and bank records to prevent material errors and downstream disputes.
Document Assumptions
List all key assumptions and provide sensitivity analysis so users understand how changes affect the conclusion of value.
Preserve Evidence
Retain original supporting documents and analysis worksheets in a secure archive to support audits, tax inquiries, or litigation.

Common Preparation Mistakes to Avoid

  • Using outdated comparables that predate the valuation effective date, which skews market-based conclusions and can lead to lender rejection.
  • Failing to disclose material assumptions or related-party transactions, creating ambiguity that undermines report admissibility in tax or legal contexts.
  • Omitting supporting schedules or raw data, leaving conclusions unsubstantiated and increasing the likelihood of challenge or rework.
  • Allowing mismatched names or incorrect legal descriptions, which can invalidate attachments and complicate title or tax filings.

Potential Consequences of an Incorrect Valuation

Regulatory Adjustment: IRS or regulators may adjust taxable values, triggering penalties and interest.
Loan Denial: Lenders may reject financing or require additional appraisal work.
Legal Dispute: Errors can lead to litigation or expert challenges in court.
Professional Liability: Valuers may face malpractice claims or disciplinary action.
Backup Withholding: Incorrect taxpayer identification may trigger 24% backup withholding.
Reputational Harm: Repeat errors reduce stakeholder confidence and can limit future engagements.

Comparison: Common eSignature Pricing and Capabilities

Summary of typical vendor pricing and capability indicators for eSignature services used to finalize and distribute valuation documents.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies Varies Varies Varies
Bulk Send Yes Varies Varies Varies Varies
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies Varies Varies

Use Cases: How Valuation Statements Are Applied

Real-world scenarios illustrate how the statement supports transactions and compliance.

Lender Collateral Review

A regional bank requested a third-party valuation to underwrite a commercial loan

  • The valuer used an income approach with lease schedules as support
  • The signed report clarified collateral value, satisfied underwriting conditions, and reduced the lender’s need for additional security documentation.

Estate Tax Filing

An executor needed an opinion of value for estate tax reporting

  • The firm prepared a market-based report with appraisal exhibits
  • The document supported the estate tax return, reduced IRS follow-up, and provided a defensible basis for the reported estate value.

Frequently Asked Questions About Valuation Statements

Answers to common questions about validity, signatures, notarization, and revisions for Financial Statements of Valuation.


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