NACVA letter re CoreValue 'Calculation of Value'

The following disclaimer language was provided courtesy of NACVA and is recommended for use by its members using the CoreValue product.

DISCLAIMER for Certified Valuation Analysts and their clients’ use of CoreValueⓇ; refer inquiries regarding this Disclaimer and the Scope of Calculation to your Certified Valuation Analyst (CVA) and/or the National Association of Certified Valuation Analysts (NACVA) as appropriate. CoreValue software is used subject to the Terms of Service and Privacy Policy. All rights reserved.

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Scope of Calculation Report to determine the CoreValue "value".

The reported analysis included in this report adheres to industry recognized valuation standards and the following explains the relationship between the value estimated by the CoreValue software and these standards.

The value estimated by CoreValue falls within the scope of a Calculation Engagement. It is called a Calculated Value.

This is distinguished from an Conclusion of Value engagement (Valuation Engagement) for reasons related to scope limitations, agreed upon procedures, and assumptions being made. For these reasons a Calculation Report is a more streamlined analysis, yet still a good tool when attempting to establish a benchmark value.

The elements of a Calculation Engagement are specified below.

It is agreed between the advisor and the client that the CoreValue proprietary process has been used to develop the Calculation of Value shown in the CoreValue report.

The subject interest considered as part of the CoreValue process is a 100% controlling, marketable interest in the client’s company.

The date of the CoreValue report shall serve as the Calculation Date.

This CoreValue analysis is prepared solely for the client for purposes of internal business consulting and shall not be used for any other purpose or by any other party for any purpose.

The CoreValue analysis is prepared under a fair market value standard, as agreed with the client, on a going-concern basis. The parties have agreed that discounts are not considered in the CoreValue analysis.

The purpose of a Calculation Engagement is to determine the Calculated Value of the subject company where the client has requested only limited analyses to be performed. In this case, the analysis is limited to the CoreValue proprietary process. Based on these limitations, the analyst will not be rendering a Conclusion of Value.

In a Calculation Engagement, the valuation analyst and the client agree on the specific valuation approach(es) and valuation method(s) the valuation analyst will use and the extent of valuation procedures the valuation analyst will perform to estimate the value of the subject interest. The parties have agreed hereby on use of the CoreValue proprietary process and software to calculate the value of the subject company. A Calculation Engagement does not include all the procedures required in a Valuation Engagement (Conclusion of Value), as that term is defined in professional standards. Had all the procedures been performed; the results might have been different.

By accepting this report, the client agrees with the approaches, methods, and extent of calculation procedures performed with specific reliance and development based upon the CoreValue proprietary process.

This Calculation of Value is based on information provided by the client to date and the data used in this report was obtained from sources believed to be reliable. All data inputs that have bearing on the calculated values have been considered as part of the CoreValue proprietary process. However, as agreed with the client, the data has not been corroborated and all restrictions and agreements that may exist have not been considered.

CoreValue does not purport to be a guarantor of value; therefore, CoreValue makes no guarantees as to what values individual buyers and sellers may reach in an actual transaction. This Calculation shall not replace any due diligence that takes place as part of a contemplated transaction.

We, by reason of this Calculation Engagement, are not required to furnish a complete valuation report as would be required in a Valuation Engagement (Conclusion of Value), or to give testimony, or to be in attendance in court with reference to the assets, properties, or business interests in question unless arrangements have previously been made.

This Calculation was developed, and this analysis has been prepared, in conformity with, and is subject to, the requirements of the code of professional ethics and standards of professional conduct of the professional valuation organization(s) of which we are members. We have performed a Calculation Engagement, as that term is defined in the National Association of Certified Valuators and Analyst’s Professional Standards. The estimate of value that results from a Calculation Engagement is expressed as a Calculated Value.