IRC 409A Common Stock Valuation
This free, guided checker walks your team through the key decision points for IRC 409A Common Stock Valuation. Answer a few questions to see the likely approach and the evidence to document.
Open the free tool
For owners, CFOs, and deal and reporting teams
Fairness Opinion in a Transaction
This free, guided checker walks your team through the key decision points for Fairness Opinion in a Transaction. Answer a few questions to see the likely approach and the evidence to document.
7 guided steps
Private in your browser
Official guidance links
Start the free checker
Your free guided checker
Answer a few quick questions below. It is private - nothing is submitted or stored - and takes about a minute.
This tool is a high-level valuation screening aid for general information only and is not a valuation, appraisal, accounting, tax or legal opinion. A defensible conclusion of value requires a qualified valuation specialist applying professional standards to entity-specific evidence.
The questions this tool walks you through
Here is what the checker asks and why each step matters. Prefer to talk it through? Contact us and we will help directly.
Is the scope of work defined and documented, including the purpose to opine on the fairness of the consideration, the intended users, the applicable basis of value, and the extent of investigation?
Scope of work fixes what the opinion does and does not cover, the intended users who may rely on it, and the basis of value it uses. Document these first, because a fairness opinion assembled without a defined scope cannot state what standard it was measured against or who is entitled to rely on it.
Define and document the scope of work - purpose, intended users, basis of value, effective date, and extent of investigation - before developing the opinion under IVS 101 (Scope of Work).
Official guidance: International Valuation Standards
On whose behalf, and for what purpose, is the opinion being provided?
The party served determines whose perspective defines fairness and which side of the price the analysis stresses. A related-party transaction adds a conflict dimension that a disinterested committee must own. Confirm the assignment is genuinely a fairness opinion on consideration, because a solvency or standalone-value engagement answers a different question entirely.
Frame the opinion around the fairness of the consideration to be received by the target's shareholders under IVS 104 (Bases of Value). Frame the opinion around the fairness of the consideration to be paid by the acquirer under IVS 104 (Bases of Value). Frame the opinion to support the disinterested committee and align with the conflict disclosures under IVS 101 (Scope of Work). A solvency, capital-adequacy, or standalone valuation assignment is governed by its own scope and basis of value under IVS 104 (Bases of Value); it is not a fairness opinion on transaction consideration.
Official guidance: International Valuation Standards
Is the provider free of interests that would impair objectivity, with any relationships and fee arrangements identified and disclosed?
Independence protects the weight a board and its shareholders can place on the opinion. Disclosure cures many relationships and fee arrangements, including a success fee, but an interest that a reasonable observer would see as impairing objectivity is not cured by disclosure. Identify every relationship and fee up front, because an undisclosed conflict discovered later can void reliance on the opinion.
Address the conflict or engage an independent provider, and confirm the scope of work supports an objective opinion, under IVS 101 (Scope of Work).
Official guidance: International Valuation Standards
Which valuation approaches were performed and reconciled to support the range?
A fairness opinion typically triangulates a discounted cash flow against comparable companies and precedent transactions, using a premiums-paid analysis to test control premiums. Relying on a single approach is defensible only when the others are genuinely not meaningful and that is documented, because one method with no corroboration cannot establish that the consideration sits in a supportable range.
Reconcile the income and market approaches into a supported range under IVS 105 (Valuation Approaches and Methods). Confirm the documented reason the income approach was omitted and reconcile the market methods under IVS 105 (Valuation Approaches and Methods). Confirm the documented reason the market approaches were omitted and stress-test the discounted cash flow under IVS 105 (Valuation Approaches and Methods). Perform and reconcile at least one primary approach with corroborating evidence before a range can be expressed under IVS 105 (Valuation Approaches and Methods).
Official guidance: International Valuation Standards
Do the approaches indicate a consistent range, with outliers reconciled and key inputs (forecast, discount rate, multiples, and control adjustments) supportable?
The analyses rarely agree to the dollar; the work is reconciling them into a defensible range and explaining the spread. Test whether the management forecast is reasonable, whether the discount rate and selected multiples are supported, and whether control and synergy adjustments belong in the range, because an unreconciled or unsupported input undermines the entire conclusion.
Reconcile the conflicting approaches and support the key inputs before expressing a range under IVS 105 (Valuation Approaches and Methods).
Official guidance: International Valuation Standards
Is the opinion framed to address only the fairness of the consideration from a financial point of view, and expressed against a range of values rather than a single point?
A fairness opinion is narrow by design: it opines on the consideration from a financial point of view and does not bless the process, the tax treatment, or the accounting. It compares the consideration to a range of indicated values, not to a single number. Confirm this framing before concluding, because an opinion that overreaches its scope invites reliance it was never meant to bear.
Reframe the scope and the form of the opinion so it addresses only financial fairness of the consideration and is expressed against a range under IVS 101 (Scope of Work).
Official guidance: International Valuation Standards
Where does the transaction consideration fall relative to the range of values indicated by the analyses?
The fairness conclusion turns on where the negotiated consideration sits against the range the analyses produce. Consideration inside the range generally supports fairness; consideration outside it in an unfavorable direction generally does not; a value on the boundary or a range too wide to read means the analyses are not yet decisive. State the conclusion against the range, never as a promise that the deal is a good one.
The consideration falls within the indicated range, supporting a fair-from-a-financial-point-of-view conclusion under IVS 105 (Valuation Approaches and Methods). The consideration falls outside the indicated range unfavorably to the party served, which does not support a fair conclusion under IVS 105 (Valuation Approaches and Methods). Tighten the analyses and narrow the range before a conclusion can be expressed under IVS 105 (Valuation Approaches and Methods).
Official guidance: International Valuation Standards
Want a professional to confirm your answer?
Send us your situation and one of our senior CPAs will review it with you - fixed fee, no surprises.
Contact Us