United States. IRS Business Valuation Guidelines and the qualified appraisal rules
Which business valuation report does your purpose require?
Valuation reports differ enormously in price, but what separates them is acceptance: who will read one, and what they require of it. A short calculation suits a board conversation and is useless on a gift tax return.
| 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 what decides whether the fee was wasted: whether the report is accepted by the person it was written for. A valuation firm can produce any of these; the useful conversation with one starts by naming which.
Every requirement stated here is taken from primary material. That means 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. It also means 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: a firm's own description of what its report is good for is the thing you are trying to check.
Order runs from lightest scope to heaviest: 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 is a better document than a padded full appraisal. 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. A range here would be a guess wearing the appearance of a benchmark. The table gives instead 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 information site. 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.
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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; its type matters as much as its number. Types run from a broker's opinion of value, a commercial view from someone who wants the listing, to a calculation of value with an agreed scope. Then full conclusions of value, and reports prescribed by regulation. Acceptance by the intended reader separates them.
What is the difference between a calculation of value and a conclusion of value?
A calculation of value applies only the approaches and methods analyst and client agree in advance, and discloses that restriction. A conclusion of value applies whatever the analyst judges appropriate. The restriction removes the most expensive work, hence the lower fee. It is fine if the reader agreed it; otherwise an opposing expert quotes it first.
What must a business valuation report contain?
The IRS Business Valuation Guidelines require enough detail to see how conclusions were reached. They require a signed certification that analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions. They direct that all three approaches be considered: asset-based, market and income. 26 CFR 1.170A-17 prescribes charitable contribution contents, including the method and its specific basis.
Who is a qualified appraiser?
26 CFR 1.170A-17(b) defines one, for a charitable contribution, as an individual with verifiable education and experience valuing the type of property. Two routes qualify: completed professional or college-level coursework plus two or more years valuing that type of property, or a recognised appraiser designation. Both are tied to the type of property, checkable from the report itself.
When must a qualified appraisal be dated?
It must be signed between 60 days before the contribution and the return's due date, including extensions. Its valuation effective date must be no earlier than 60 days before the contribution. This fails more often than the substance does, in both directions. An early report can miss the window; a late one dated to look timely is far more serious.
Can I use a sale valuation for a gift tax return?
Generally no. Standards of value and reporting differ: an estate or gift valuation is written for a reader who tests it rather than relies on it. The IRS guidelines set what it must show and require a signed certification. A persuasive sale-side document is unlikely to meet that. Need both? Say so at engagement so the work is structured once.
Why do you not publish valuation report fees?
No authority publishes them. Firms set them by company complexity, the number of share classes, whether a comparable transaction set must be built, and turnaround. A range without quotes behind it would be a guess posing as a benchmark, anchoring you on a number describing nobody. We publish the scope each report type requires, which is what a quote prices.
Sources
This site's own datasets, every figure quoted from its source and dated:
- The median published figure in the Business Valuation Fee Index is 1,200 USD across 11 figures from 10 sources' own pages in USD (range 399 to 2,500 USD; 15 sources publish a figure), read 11 November 2026.
- The Valuation Credential and Standards Register carries 2 published figures read from 2 sources' own pages, from 199 to 625 USD, read 7 November 2026.
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.