United States. IRS Business Valuation Guidelines and the qualified appraisal rules
Which business valuation report does your purpose require?
Buyers of valuation work almost always shop on price, and the price differences between the options are enormous, which makes the shopping feel productive. It is the wrong axis. What separates these reports is not effort but acceptance: who will read it, what they will require of it, and whether a report that fails their requirement is worth anything at all. A short calculation is perfectly adequate for a board conversation and useless on a gift tax return. Here are the report types side by side, on what each one is accepted for.
| Option | Requirements checked against primary sources on 15 August 2026 | |||||
|---|---|---|---|---|---|---|
| Broker's opinion of value An owner deciding whether a sale is worth starting at all | A business broker's estimate of a likely sale range, usually derived from comparable listings and completed deals in the broker's own database, produced as part of winning the listing. | Limited, and frequently free. Typically no site visit, no normalisation of the accounts beyond obvious add-backs, and no written methodology. | A business broker. No designation is required and none is implied. | Nothing formal. It is a commercial view offered by somebody who would like to sell your business, and it should be read as one. | No prescribed contents. Often a one or two page letter with a range and a list of comparables. | Everywhere except the conversation it was written for. It carries a structural conflict, since the broker's interest is in a listing rather than in the number, and it will not be accepted by an examiner, a lender or a court. |
| Calculation of value Planning, board discussion, and deciding whether a full engagement is worth commissioning | A valuation engagement of deliberately limited scope, where the analyst and the client agree in advance which approaches and methods will be used and which will not. | Limited by agreement. The analyst does not necessarily consider all three approaches, and the result is expressed as a calculated value rather than as an opinion of value. | A valuation analyst, typically a CPA or a credentialed valuation professional. | Internal planning, shareholder discussions, preliminary transaction thinking, and deciding whether to commission the fuller work. | A statement of the agreed scope and the procedures performed, and a clear statement that the scope was limited and that a different result might have followed from a fuller engagement. | The moment somebody outside the room reads it. Because scope was limited by agreement, the limitation is the first thing an opposing expert or an examiner will find, and it is disclosed in the report itself. |
| Conclusion of value A sale, a buy-in or buy-out, or any negotiation where the other side will test the number | A full valuation engagement in which the analyst applies the approaches and methods judged appropriate, without a scope restriction agreed in advance, and expresses an opinion of value. | Full. Consideration is given to the asset-based, market and income approaches, with the reasoning for the weighting written down. | A valuation analyst, usually credentialed. Independence matters here in a way it does not for a calculation. | Transactions, financing, buy-sell agreements, and as a starting point for most disputes. It is the workhorse document. | Enough detail for a reader to reach a clear understanding of the valuation analyses and to see how the conclusions were reached, together with the analyst's certification. | Where a statute or regulation imposes its own definition of a compliant report, such as the qualified appraisal rules. A conclusion of value is not automatically a qualified appraisal and does not become one by being thorough. |
| Valuation for an estate or gift return Transfers of an interest in a closely held business that will be reported to the IRS | A full appraisal prepared to withstand examination, written for a reader whose job is to test it rather than to rely on it. | Full, with the analysis and the adjustments documented rather than asserted. Historical financial statements are analysed and, if necessary, adjusted for consistency with the methodology selected. | A qualified appraiser. The IRS guidelines require each report to carry a signed certification, including a statement that the reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions. | Estate and gift filings, and the examination that may follow one. | The IRS guidelines require reports detailed enough that a reader achieves a clear understanding of the valuation analyses and can see how the conclusions were reached, with consideration given to all three approaches. | When the valuation date is wrong. It is fixed by the transfer or the death, not chosen, and an otherwise excellent report as of the wrong date answers a different question. |
| Qualified appraisal for a charitable contribution Donating an interest in a closely held business and claiming a deduction for it | A report meeting a regulatory definition rather than a professional convention. The regulation says what it must contain, who may write it, and when it may be dated. | Full, and prescribed. The appraisal must be prepared by a qualified appraiser in accordance with generally accepted appraisal standards. | A qualified appraiser: an individual with verifiable education and experience in valuing the type of property, who has either completed professional or college-level coursework plus two or more years of experience valuing that type of property, or earned a recognised appraiser designation. | A charitable contribution deduction, and nothing else automatically. Meeting this definition does not make the report right for an estate filing or a court. | A prescribed list, including a description of the property, the valuation effective date and fair market value, the date of contribution, the appraiser's name, address and taxpayer identification number, their qualifications including education and experience, their signature and date, a declaration acknowledging the penalty under section 6695A, a statement that it was prepared for income tax purposes, the method of valuation used, and the specific basis for the valuation. | On dates, more often than on substance. The appraisal must be signed no earlier than 60 days before the contribution and no later than the return due date including extensions, and the valuation effective date must be no earlier than 60 days before the contribution. |
| Litigation appraisal Divorce, shareholder disputes, and anything where the report will be cross-examined | A full appraisal written as evidence, by somebody prepared to defend every judgement in it under questioning from an expert instructed to dismantle it. | Full, and then some. The working papers matter as much as the report, because they are discoverable and they will be read. | A credentialed appraiser with testimony experience. This is the one engagement where the appraiser's history of being cross-examined is a genuine selection criterion. | Court and arbitration, subject to whatever admissibility rules the forum applies. | Everything a conclusion of value requires, plus explicit treatment of the standard of value, the valuation date fixed by the proceeding, and any discounts for lack of control or lack of marketability, each of which is usually contested directly. | When an earlier, cheaper valuation of the same business exists. It does not disappear, the other side will find it, and every difference between the two becomes a question the appraiser has to answer. |
How these were chosen, and how they are ordered
Six report types rather than six firms. Firms are compared on fee and turnaround elsewhere; this page compares the thing that decides whether the fee was wasted, which is whether the report is accepted by the person it was written for. A valuation firm can produce any of these, and the useful conversation with one starts by naming which.
Every requirement stated here is taken from primary material: the IRS Business Valuation Guidelines at IRM 4.48.4, which govern the IRS's own valuation personnel and set out what a report must show; the qualified appraisal and qualified appraiser rules at 26 CFR 1.170A-17; and IRS guidance on the sale of a business. Nothing is taken from a valuation firm's marketing, because a firm's own description of what its report is good for is the thing you are trying to check.
Order runs from the lightest scope to the heaviest, which is roughly the order of cost and exactly the reverse of the order of acceptance. It is not a ranking of quality: a calculation of value done well by a good analyst is a better document than a padded full appraisal, and it is still not admissible for the purposes the full appraisal exists to serve.
No fee appears anywhere on this page. Valuation fees are set by firms, vary by company complexity and are not published by any authority, so a range here would be a guess wearing the appearance of a benchmark. What the table gives instead is the scope each report requires, which is what a quote is actually pricing.
This page is not legal, tax or appraisal advice, and it does not tell you what your business is worth. It tells you which document your purpose demands, so that you can commission the right one first rather than the cheap one twice.
- Broker's opinion of value SBA, close or sell your business
- Calculation of value AICPA forensic and valuation services
- Conclusion of value IRS IRM 4.48.4, Business Valuation Guidelines
- Valuation for an estate or gift return IRS IRM 4.48.4, Business Valuation Guidelines
- Qualified appraisal for a charitable contribution 26 CFR 1.170A-17, qualified appraisal and qualified appraiser (Cornell LII)
- Litigation appraisal IRS IRM 4.48.4, Business Valuation Guidelines
Accounting Firm Value is an independent site operated by Ellul Solutions Ltd. It is not affiliated with, endorsed by or connected to the Internal Revenue Service, the AICPA, the Small Business Administration or any valuation firm, and it is not an appraisal firm, a law firm or a tax adviser. Nothing here is a valuation or advice on a filing. We take no commission from any firm and carry no paid placements, and no fee, price or valuation figure appears anywhere on this site, because no authority publishes one and a range without quotes behind it launders a guess into a benchmark. Every requirement stated is taken from a primary source cited on this page and read on the date shown.
Business valuation report types and what each is accepted for, 2026
Last updated
The difference between a two page calculation and a full appraisal is not thoroughness for its own sake. It is whether the reader the report was written for will accept it, and for several purposes that acceptance is defined by regulation rather than by professional judgement.
Requirements are taken from primary sources read on 15 August 2026 and cited in full below. The reporting standard for a valuation report, the instruction to consider all three approaches, and the certification requirement come from the IRS Business Valuation Guidelines at IRM 4.48.4, which is the manual the IRS applies to its own valuation personnel. The qualified appraisal and qualified appraiser requirements, including the prescribed report contents, the appraiser's education and experience routes and the 60 day and return due date timing limits, come from 26 CFR 1.170A-17. The tax treatment of a sale, including the residual method allocation, comes from IRS guidance on the sale of a business. No fee, price or valuation figure appears in this table: valuation fees are set by firms, are not published by any authority, and a range here would be a guess given the appearance of a benchmark. The acceptance column states what a report of that type is accepted for by the reader it is written for; it is not a statement that any particular report will be accepted, which depends on its contents.
| Report type | Scope | Accepted for | The requirement that catches people out |
|---|---|---|---|
| Broker's opinion of value | Limited, often free, no prescribed methodology | Nothing formal. A commercial view from a party who wants the listing | It is not independent, and the conflict is structural rather than occasional |
| Calculation of value | Limited by agreement, approaches and methods restricted in advance | Internal planning, board discussion, deciding whether to commission more | The scope limitation is disclosed in the report itself, so it is the first thing an outside reader finds |
| Conclusion of value | Full, all three approaches considered, weighting reasoned | Transactions, financing, buy-sell agreements, and the starting point in most disputes | It is not automatically a qualified appraisal, and thoroughness does not make it one |
| Estate or gift valuation | Full, analysis and adjustments documented rather than asserted | Estate and gift filings and any examination that follows | The valuation date is fixed by the transfer or the death. A report as of the wrong date answers a different question |
| Qualified appraisal, charitable contribution | Full and prescribed by regulation | A charitable contribution deduction, and nothing else automatically | Signed no earlier than 60 days before the contribution and no later than the return due date including extensions |
| Litigation appraisal | Full, with working papers written on the assumption they will be read | Court and arbitration, subject to the forum's admissibility rules | An earlier cheap valuation of the same business does not go away, and every difference becomes a question |
| Any of the above, applied to the sale itself | Not a valuation question at all | Nothing. The allocation of the price across assets is a separate negotiation | Both buyer and seller must use the residual method to allocate the consideration, and their interests in that allocation are not aligned |
- The IRS Business Valuation Guidelines require a valuation report detailed enough for a reader to reach a clear understanding of the analyses and to see how the conclusions were reached, with a signed certification.
- The IRS directs its own valuation personnel to give consideration to all three approaches: the asset-based approach, the market approach and the income approach.
- A qualified appraisal for a charitable contribution must be signed no earlier than 60 days before the date of the contribution and no later than the return due date including extensions.
- A qualified appraiser must have verifiable education and experience: either professional or college-level coursework plus two or more years valuing that type of property, or a recognised appraiser designation.
- A qualified appraisal must state the method of valuation used and the specific basis for the valuation, and carry a declaration acknowledging the penalty under section 6695A.
- A calculation of value discloses its own scope limitation, which is why it is adequate for internal planning and weak in front of anyone who did not agree that limitation.
- Both the buyer and the seller of a business must use the residual method to allocate the consideration across the assets transferred, which is a negotiation rather than a consequence of the price.
Cite this page
“Business valuation report types and what each is accepted for, 2026”, Accounting Firm Value, https://accountingfirmvalue.com/ (updated 2026-08-15). Requirements are taken from primary sources read on 15 August 2026 and cited in full below. The reporting standard for a valuation report, the instruction to consider all three approaches, and the certification requirement come from the IRS Business Valuation Guidelines at IRM 4.48.4, which is the manual the IRS applies to its own valuation personnel. The qualified appraisal and qualified appraiser requirements, including the prescribed report contents, the appraiser's education and experience routes and the 60 day and return due date timing limits, come from 26 CFR 1.170A-17. The tax treatment of a sale, including the residual method allocation, comes from IRS guidance on the sale of a business. No fee, price or valuation figure appears in this table: valuation fees are set by firms, are not published by any authority, and a range here would be a guess given the appearance of a benchmark. The acceptance column states what a report of that type is accepted for by the reader it is written for; it is not a statement that any particular report will be accepted, which depends on its contents.
Want quotes for the right report?
Tell us the purpose and the deadline. Valuation firms that produce that kind of report will contact you directly.
Go deeper
Each one cites where its numbers come from.
- Calculation of value or conclusion of value: which you need
The difference is a scope restriction agreed in advance, disclosed in the report. Where that is fine, where it is fatal, and what it does to the fee.
- What a business valuation report must contain
The IRS reporting standard for its own personnel, and the prescribed contents of a qualified appraisal. Two different specifications, both checkable.
- Who may sign: qualified appraiser requirements
For a charitable contribution the appraiser is defined by regulation: verifiable education and experience, two years or a recognised designation, and hard dating rules.
- The valuation report for a sale, and the allocation nobody plans for
A sale needs a conclusion of value, not a calculation. And the price is only half the negotiation: the residual method allocation is the other half.
Common questions
What is a business valuation report?
A written record of how a value was determined, and the type of report matters as much as the number in it. The range runs from a broker's opinion of value, which is a commercial view from somebody who wants the listing, through a calculation of value with a scope agreed in advance, to a full conclusion of value, and on to reports whose contents are prescribed by regulation. What separates them is not thoroughness for its own sake but acceptance: whether the reader the report was written for will accept it.
What is the difference between a calculation of value and a conclusion of value?
A calculation of value is an engagement where the analyst and the client agree in advance which approaches and methods will be applied and which will not, and the report discloses that restriction. A conclusion of value carries no such restriction: the analyst applies what they judge appropriate and expresses an opinion of value. The fee difference is real because the restriction removes the most expensive work. The disclosed scope limitation is fine when the reader agreed it, and is the first thing an opposing expert quotes when they did not.
What must a business valuation report contain?
The IRS Business Valuation Guidelines require reports detailed enough for a reader to achieve a clear understanding of the valuation analyses and to see how the conclusions were reached, with a signed certification stating that the reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions. They also direct that consideration be given to all three approaches: asset-based, market and income. For a charitable contribution, 26 CFR 1.170A-17 prescribes a specific list of contents including the method of valuation used and the specific basis for it.
Who is a qualified appraiser?
For a charitable contribution, 26 CFR 1.170A-17(b) defines one as an individual with verifiable education and experience in valuing the type of property. There are two routes: successfully completed professional or college-level coursework plus two or more years of experience valuing that type of property, or a recognised appraiser designation. Both are tied to the type of property, so experience valuing real estate is not experience valuing a closely held business interest, and that is checkable from the report itself.
When must a qualified appraisal be dated?
It must be signed no earlier than 60 days before the date of the contribution and no later than the due date of the return including extensions, and the valuation effective date must be no earlier than 60 days before the contribution. This fails more often than the substance does, and in both directions: a report commissioned early in the interests of being organised can fall outside the window, and one commissioned late and dated to look timely is a considerably more serious problem.
Can I use a sale valuation for a gift tax return?
Generally no. The standard of value and the reporting requirements differ, and an estate or gift valuation is written for a reader whose job is to test it rather than to rely on it. The IRS guidelines set out what such a report must show and require a signed certification. A sale-side document that was persuasive to a buyer is unlikely to meet that specification. Where both uses are genuinely needed, say so at engagement so the appraiser can structure the work once.
Why do you not publish valuation report fees?
Because no authority publishes them. Valuation fees are set by firms and vary with company complexity, the number of share classes, whether a comparable transaction set has to be built, and turnaround. A range published without the quotes behind it would be a guess given the appearance of a benchmark, and it would anchor a reader on a number that describes nobody. What is publishable, and more useful, is the scope each report type requires, because that is what a quote is actually pricing.
Sources
Commission the right report the first time
Six report types on what each one is accepted for, with the requirement that catches people out on each.