BV202 Introduction to Business Valuation, Income Approach

General Information

This OnDemand course provides students with convenient 24-7 online access to instructional modules via "My ASA Courses" immediately following registration. 

This course consists of:

• Narrated instructional modules;
• Downloadable course handout materials (PDF);
• Class assignments and exercises; and
• Practice tests.

Printed or hard copies are not provided to ASA OnDemand course registrants. Once the course OnDemand course and downloadable materials have been accessed, the course is no longer refundable.

The course and final exam must be completed within 90 days of purchase. The option to request an additional 90 day extension at education@appraisers.org is available (non-refundable fee is applicable). At any point throughout the duration of this OnDemand course, the student has the option to go back and log in to repeat and/or review any of the modules and/or practice tests. 

ASA-accredited members (AM, ASA, FASA) who would like to attend this class will receive a 50% discount. This discount will be automatically applied at checkout.

The final exam is multiple choice and securely administered online and remotely proctored. Additional final exam instructions will be provided within the course. 

Description

BV202 was designed to build upon the learning outcomes achieved in BV 201 by adding the income approach to the student's skill set/ toolbox. This course places heavy emphasis on the three key variables of a valuation (regardless of whether the valuation is concerning fair value for financial reporting, fair market value for litigation or tax-related valuations):

• Benefit Streams;
• Risks (i.e., discount rate); and
• Growth.

Students will be provided with the core concepts necessary for them to immediately apply the income approach without regard to the specific standard of value or purpose for the valuation. 

Instructional Methods

Methods include narrated instructional modules, class assignments/exercises and practice tests.  

Course Audience

BV202 is one of four Principles of Valuation (POV) courses required for those seeking a credential with ASA.  In addition, this course is also of interest to accountants, attorneys, business brokers, investment bankers, Internal Revenue Service staff and the appraisal community at large who are involved or interested in the valuation of businesses.

Learning Level 

Fundamental 

Continuing Education and Contact Hours

28.8 ASA CE Instructional Hours and 3 Exam Hours | CPE hours are not awarded for this offering.

Upon completion of this course, students will be able to:

• Assess the applicability of different Income Approach methods to a specific assignment;
• Define, explain, and assess the applicability of alternative benefit streams;
• Determine and make necessary normalization and control adjustments to financial statements; 
• Evaluate management projections; perform independent financial projections if necessary;
• Differentiate and apply the capitalization of benefits and discounted future benefits methods of valuation under the income approach;
• Develop equity and invested capital discount rates;
• Apply and reconcile the results of the build-up and modified capital asset pricing models;
• Develop estimates of the risk free rate, the equity risk premium, beta, the industry risk premium, and the size premium from recognized sources;
• Identify and evaluate unsystematic risk (company specific risk);
• Summarize the derivation and use of data from Morningstar's Stocks, Bonds, Bills, and Inflation and the Duff & Phelps Risk Premium Report;
• Discuss controversies involved in key discount rate components, the equity risk premium and the company specific risk premium;
• Identify the principles behind an asset approach;
• Describe circumstances where the application of and reliance on the asset approach might be appropriate;
• List the hierarchy of assets and returns on those assets;
• Apply asset approach valuation methods;
• Explain the concepts behind the excess earnings model and their relevance to specific valuation assignments;
• Communicate the difference between the traditional excess earnings method and the multiple period excess earnings method related to valuing intangibles;
• Perfom an asset approach valuation using the net asset value with the excess earnings method; and
• Determine the level of value resulting from the use of each income method and each asset method.