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Assumptions and Limiting Conditions – Chase Bank

Assumptions and Limited Conditions (Ver. 1.2 (Chase Bank Only) | Rev. 9/13/19)

These Assumptions and Limiting Conditions are standard conditions and limiting conditions that Reliant Business Valuation applies in many business valuation assignments. It is likely the Assumptions and Limiting Conditions in your Business Valuation will include these Assumptions and Limiting Conditions. However, there may be some slight changes due to the particular nature of your Assignment. Or, the Appraiser may determine it is necessary to add certain Extraordinary Assumptions and Limiting Conditions, due to the specific issues in your Business Valuation. The Assumptions and Limiting Conditions in your Business Valuation Report will be the final and authoritative version of Assumptions and Limiting Conditions for your Business Valuation. Thus, in the event of any differences between this version of the Assumptions and Limiting Conditions and the version of the Assumptions and Limiting Conditions in the Report, the version in the Report shall prevail.

The Assignment and Report is subject to the following assumptions and limiting conditions, and any intended user that relies on the information contained in this report (either partially or in its entirety) explicitly agrees to all of the following conditions:

  1. All of the facts, data, information and/or material to this appraisal assignment (“Facts & Data”) used to prepare this report, its forecasts, estimates, analysis, and projections, including those given to the appraiser by the Client or Company and others associated with the Company (the “Information Provider”), are considered to be reliable but cannot be guaranteed to be accurate.
  2. Facts & Data provided to the appraiser have not been audited or verified for accuracy by the appraiser. The accuracy and validity of the Facts & Data supplied to the appraiser is the responsibility of the Information Provider,
  3. All Facts & Data set forth in the report are accepted to be true and accurate and that the Information Provider of such Facts & Data has not knowingly withheld or omitted anything from the appraiser that could affect the value estimate.
  4. The appraiser assumes that there are no hidden or unexpected conditions of the business that would adversely affect value, other than as indicated in this report. The appraiser has not knowingly withheld or omitted anything from the report that could affect the value estimate.
  5. IRS Revenue Ruling 59-609 states, “Detailed profit-and-loss statements should be obtained and considered for a representative period immediately prior to the required date of valuation, preferably five or more years.”[1] The Client has provided historical financial statements. The appraiser notes that there may be additional inherent risk in relying on limited financials (as opposed to the recommended five years/sixty months by the IRS).
  6. Information Provider has made the appraiser aware of all relevant facts, data or other conditions that existed at the time of the valuation date, when such Facts & Data are, or should be known to the Information Provider. It is the responsibility of the Information Provider to provide the appraiser with any additional Facts & Data of which the Information Provider becomes aware, in writing, either subsequent to an initial provision of such Facts and Data before the valuation report is completed, and/or subsequent to the completion of the valuation report. If the appraiser learns of additional Facts & Data, other than those made available to the appraiser by the Information Provider, either during the valuation assignment, or after completion of the valuation report, the appraiser reserves the right to review, and potentially revise, all calculations and statements made within the report and revise his or her opinion based on the revelation of such additional Facts & Data. The appraiser shall determine, at the appraiser’s sole discretion, whether there will be an additional charge for revision of the valuation report due to any additional Facts & Data.
  7. This report has been prepared for the stated purpose and function. It is not to be used or relied upon for any other purpose. This report is only valid as of the Effective Date identified herein. No events subsequent to the Effective Date have been taken into consideration.
  8. The extent of liability for the completeness or accuracy of the data, opinions, comments, recommendations, or conclusions shall not exceed the amount paid to the appraiser for professional fees and, then, only to the intended user.
  9. The appraisal estimate of fair market value reached in this report is necessarily based on the definition of fair market value as defined in Section 1.8 Standard of Value: Fair Market Value.  An actual transaction may be concluded at a higher value or lower value depending on the circumstances surrounding the company, the appraised business interest, or the motivations and knowledge of both the buyers and sellers at that time.
  10. It should be specifically noted that the valuation assumes the business will be competently managed and maintained by financially sound and prudent owners, over a reasonable period of ownership. This valuation assignment does not entail an evaluation of management’s effectiveness, nor is the appraiser responsible for analyzing events beyond the Effective Date including, but not limited to, future marketing efforts and other management or ownership actions upon which actual results will depend.
  11. The appraiser notes that the transaction type (stock or asset) and the assets and/or liabilities included in the Final Value are based on information extracted from sources provided to the appraiser, such as a Letter of Intent to Purchase, Purchase Agreement, Business Valuation Questionnaire, and Supplemental Questionnaire, among others, as of the report date. If the terms of the transaction are modified, the Final Value may be impacted.  The appraiser is not obligated to modify or update this report, unless specifically requested to update the report by the Client. Such updates must be mutually agreed upon by Client and appraiser and are subject to the appraiser’s update fees which are at the sole discretion of the appraiser.
  12. No opinion is intended to be expressed within the valuation for matters that require legal or other specialized expertise, investigation, or knowledge beyond that customarily employed by appraisers valuing businesses. The appraiser is not responsible for any losses incurred by the Company or those associated with the Company, legal, or tax matters relative to the valuation. All values are stated without any reverence to legal claims unless specifically stated.
  13. The engagement for appraisal, consultation, or analytical service is fulfilled and the total fee is due and payable upon completion of the report. The appraiser and/or employees of Reliant Business Valuation, LLC are not obligated by reason of this report to provide testimony (expert or fact) before any court or commission, unless mutually agreeable arrangements are made for such testimony, including appraiser’s fees, which are at the sole discretion of the appraiser.
  14. It is assumed that there are no regulations of any government entity to control or restrict the use of the underlying assets or the company as a whole, unless specifically referred to in the report, and that the underlying assets and the company as a whole will not operate in violation of any applicable government regulations, codes, ordinances, or statutes.
  15. All titles are assumed to be good and marketable, unless otherwise stated. No investigations of titles to assets or searches for liens against assets have been made by the appraiser.
  16. This report may contain prospective financial information, estimates, or opinions that represent the view of the appraiser about reasonable expectations as of the Effective Date. Such information, estimates, or opinions do not fully reflect the range of factors that may potentially impact the future operations of the Company, including, but not limited to: income, profit, or extraneous events.
  17. Hazardous substances, if present, can introduce an actual or potential liability that could adversely affect the marketability and value of a business. Such liability may be in the form of immediate recognition of existing hazardous conditions, or future liability that could stem from the release of currently non-hazardous contaminants. In the development of the opinion of value, no consideration was given to such liability or its impact on value unless specifically stated. The appraiser has not taken into account any and all future environmental considerations and potential liability.
  18. Possession of this report, or a copy thereof, does not carry with it the right of publication of all or part of it, nor may it be used for any purpose without the previous written consent of the appraiser, and in any event only with prior written authorization. Every page of this report is copyrighted by Reliant Business Valuation, LLC. Excerpts taken out of context of this report may be misleading or misconstrued.
  19. Neither all nor any part of the contents of this report shall be disseminated to the public through advertising, public relations, news, sales, or other media without the prior written consent and approval of the appraiser, which shall be at the sole discretion of the appraiser.
  20. Public information, purchased private information, and industry statistical information are from sources deemed to be reliable. The appraiser does not make any representation as to the accuracy or correctness of such information beyond reason and has accepted the information as true without further investigation. Reliant Business Valuation, LLC is not and does not claim to be a guarantor of value. The valuation of closely-held businesses is an imprecise science, with value being a question of fact and varying estimates of value. Reliant Business Valuation, LLC has utilized conceptually sound and accepted approaches and techniques of valuation within the business valuation industry in determining the estimated value included in this report.
  21. The underlying transaction of the Company may be based on either a minority or majority interest. However, the appraiser has been engaged by the Client to value a 100% interest in the Company. Therefore, the appraiser’s scope of work does not include adjustments for minority discounts such as a lack of control or lack of marketability. As such, a minority or majority interest derived from the appraiser’s subject valuation may not be equal to the pro-rata share of the 100% value.
  22. In no way is Reliant Business Valuation, LLC or the appraiser recommending that the Client offer financing to the borrower or Company, or that a potential buyer purchase the Company at a certain price. The appraiser is only offering his or her opinion of value about the fair market value of the business as of the Effective Date, and nothing further. No underwriting or analysis has been conducted on the borrower, as all buyers are assumed to be hypothetical buyers, according to the definition of fair market value stated in Section 1.8. By requesting and relying on this report, the Client agrees not to hold the appraiser responsible for any future loan default. The appraiser recommends that the Client and related parties obtain a second opinion to limit their liability or loss.

[1] Internal Revenue Service, Revenue Ruling 59-60, Sec. 4. Factors to Consider, paragraph. d.

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