Family Law Pointer - Valuing Your Business
So, you own a business in Iowa and are getting divorced. There are a number of ways it can be valued. There are three basic ways to value a business: the income, asset and market based approaches. Service oriented businesses and those with goodwill are valued on the income approach (generally the cash flow generated for the owner(s)’s benefit). Businesses with no goodwill tend to be valued at the adjusted value of their assets, and the market approach compares the sale price of similarly situated businesses to assist in determining the value of the business in question.
Appraisal methodology is complicated and requires the testimony of an expert who relies on financial statements, tax returns, industry analyses, economic trends, anticipated capital improvements, and any other factors that might impact the business’s value. The best way to approach a dissolution involving business-ownership is to contact an attorney who can help you assess which method of valuation will be most appropriate in your particular situation.
Every situation is different. This is for informational purposes only and is not a substitute for legal advice.