By John Borrowman, CPC
Borrowman Baker, LLC, BV Staffing + Consulting
Gallatin, TN

One of the challenges of competing for engagements involving intangible asset valuation is having the confidence that you can tackle whatever may come your way and that you produce a report that can stand up to the review that often comes later.

The American Society of Appraisers is preparing to roll out a new course that can help you come up to speed and capture your share of this business.

For a closer look at this course, we spoke to Ray Rath, ASA, with PricewaterhouseCoopers in Los Angeles.

Q: What does this course do that isn’t already being done by other courses?

RATH: The course was developed by a team of very experienced valuation professionals.  It takes an in-depth look at intangible valuation issues with an emphasis on financial reporting.  It provides valuation insights important for valuations of intangibles in a lot of other arenas.  One of the key elements is that it had significant peer review.  The development of the course and the peer review included significant involvement by valuation professionals of the Big 4 and other international accounting firms  with significant input by senior professionals at several of the leading independent firms also with international valuation practices.  I don’t think that’s necessarily the case with other courses.

Q: Who would benefit the most from taking it?

RATH: Anyone who’s involved in the valuation of intangible assets would benefit.  The title indicates that the course has a focus on valuations in a financial reporting context, which it does.  But, also, the course has a foundation in teaching valuation principles.  So, anyone who’s involved in the valuation of intangibles, whether they’re a valuer doing work in the financial reporting context, or someone doing tax or litigation oriented valuations, would benefit from attending.

Q: How does taking the course translate to either productivity or profitability?

RATH: Professionals doing valuations for financial reporting purposes will gain significant insight into the process of obtaining consent on a valuation position from an audit firm’s valuation review department.  The course was developed with input from people from Big Four and large accounting firm valuation groups as well as the large valuation boutiques.  So, it really reflects the wisdom of people who are involved in performing these valuations and, perhaps more importantly, those who are involved in reviewing these valuations for auditors and their audit clients.

Q: Is this intended to be one of an eventual series of courses?  What’s the plan?

RATH: The valuation of intangible assets is an exceptionally complex topic.  We title it an introductory course but it is quite complex subject matter.  We do intend to offer a second course that will focus on some of the very complex advanced topics in valuation such as valuation of in-process research and development, quantification of attrition estimates which are a very important element in valuing customer-related intangibles, and a variety of other complex valuation issues.

Q: Is there some threshold of experience or knowledge that a practitioner should have in order to get the most out of this course?

RATH: Yes there is.  Though, that’s a complex and difficult question that we’ve discussed quite a bit during course development.  Our general sense is that people that attend the course should have a year or two of business valuation experience and some familiarity with intangible asset valuations.  We do treat this as an introductory course so we try to start people at ground zero.  But, if you don’t have pre-existing year or two of valuation experience, the concepts will really be extremely difficult.

Q: Who will be the instructors?

RATH: We have an impressive group of instructors that have expressed interest.  At this point, we have focused on instructors who are working with either the Big Four or the large accounting firms.  The benefit is that those people have a strong understanding of the accounting and valuation issues and how they relate.  We also have instructors signed up from some of the very large valuation firms that are focused on performing valuations for large, multi-national clients.

John Borrowman