CBV LEVEL 1 QUESTIONS AND ANSWERS
Requirements Prior to Initial Client Meeting - CORRECT ANSWER✅✅✅1) Name of the party
engaging the valuator
2) The subject company or companies and significant shareholders
3) Nature of the assignment (E.g. Valuation, Loss quantification, transaction, etc)
4) Any other party involved (e.g. for disputes or transactions)
5) The potential users of the deliverable
6) Legal counsel representing the parties to the dispute (if any)
Requirements for the Start of the Initial Client Meeting - CORRECT ANSWER✅✅✅1) The context of
the assignment (purpose, applicable legislation, governing contracts, and other relevant factors)
2) Anticipated role of the valuator (Expert, Advocate, or Arbitrator)
Requirements After The Start of the Initial Meeting - CORRECT ANSWER✅✅✅1) Valuation/loss date
2) Appropriate definition of value to be used
3) The subject shares/assets, etc
4) The time frame for completion of the assignment
5) Payment terms (e.g. approx $, who is paying, etc)
6) Final reporting details (e.g. type of report, who it is addressed to, and management representations)
Background Information Required During Early Phases of Client Engagment - CORRECT
ANSWER✅✅✅1) Basic data concerning the business (e.g. address, management, contacts, auditors,
shareholders, etc)
2) Whether other experts need to be consulted. If so, their credentials should be confirmed in advance
3) Whether any prior valuations/offers/discussions, etc have been prepared for the asset/company
, 4) Valuator provides listing of types of documents needed (can occur after signed engagement is
received)
What is an engagement letter? - CORRECT ANSWER✅✅✅A summary of the CBV's understanding of
the terms of the engagement. Details from the initial client meeting should be an integral part of the
letter
The letter is the contract for the valuation work performed, to safeguard both the client and the CBV
What should an engagement letter include? - CORRECT ANSWER✅✅✅1) The client
2) Purpose of the assignment
3) Role of the valuator
4) Key dates (e.g. valuation date)
5) Definition of value used
6) The entities being valued
7) An outline of work to be performed and timeframe
8) Payment terms/details, including an estimated cost
9) Final reporting details
What are the 3 Categories of Qualitative Information? - CORRECT ANSWER✅✅✅1) The Company
2) The Industry
3) The Economy
Sources of Qualitative Information Gathered for "The Company" - CORRECT ANSWER✅✅✅1)
Websites and marketing
2) Financial statements/projections
3) Tax information
4) A tour of the facilities
5) Management and ownership organization charts
6) Shareholder agreement & Major leases/contracts
Requirements Prior to Initial Client Meeting - CORRECT ANSWER✅✅✅1) Name of the party
engaging the valuator
2) The subject company or companies and significant shareholders
3) Nature of the assignment (E.g. Valuation, Loss quantification, transaction, etc)
4) Any other party involved (e.g. for disputes or transactions)
5) The potential users of the deliverable
6) Legal counsel representing the parties to the dispute (if any)
Requirements for the Start of the Initial Client Meeting - CORRECT ANSWER✅✅✅1) The context of
the assignment (purpose, applicable legislation, governing contracts, and other relevant factors)
2) Anticipated role of the valuator (Expert, Advocate, or Arbitrator)
Requirements After The Start of the Initial Meeting - CORRECT ANSWER✅✅✅1) Valuation/loss date
2) Appropriate definition of value to be used
3) The subject shares/assets, etc
4) The time frame for completion of the assignment
5) Payment terms (e.g. approx $, who is paying, etc)
6) Final reporting details (e.g. type of report, who it is addressed to, and management representations)
Background Information Required During Early Phases of Client Engagment - CORRECT
ANSWER✅✅✅1) Basic data concerning the business (e.g. address, management, contacts, auditors,
shareholders, etc)
2) Whether other experts need to be consulted. If so, their credentials should be confirmed in advance
3) Whether any prior valuations/offers/discussions, etc have been prepared for the asset/company
, 4) Valuator provides listing of types of documents needed (can occur after signed engagement is
received)
What is an engagement letter? - CORRECT ANSWER✅✅✅A summary of the CBV's understanding of
the terms of the engagement. Details from the initial client meeting should be an integral part of the
letter
The letter is the contract for the valuation work performed, to safeguard both the client and the CBV
What should an engagement letter include? - CORRECT ANSWER✅✅✅1) The client
2) Purpose of the assignment
3) Role of the valuator
4) Key dates (e.g. valuation date)
5) Definition of value used
6) The entities being valued
7) An outline of work to be performed and timeframe
8) Payment terms/details, including an estimated cost
9) Final reporting details
What are the 3 Categories of Qualitative Information? - CORRECT ANSWER✅✅✅1) The Company
2) The Industry
3) The Economy
Sources of Qualitative Information Gathered for "The Company" - CORRECT ANSWER✅✅✅1)
Websites and marketing
2) Financial statements/projections
3) Tax information
4) A tour of the facilities
5) Management and ownership organization charts
6) Shareholder agreement & Major leases/contracts
