Certified Valuation Analyst (CVA): CVA

Impairment is the difference in value between the carrying amount of goodwill and the actual fair value of the goodwill. However, for federal income tax reporting purposes:

A. The cost of developing, maintenance, or restoring intangibles which are unidentifiable, have indeterminate lives, or are inherent in a continuing enterprise should be expensed as incurred.

B. Such intangibles assets which are purchased must be carried at cost and amortized over their useful lives and cannot be written down or written off at date of acquisition.

C. Identifiable intangible assets with an indefinite life should not be amortized

D. The cost of developing, maintenance, or restoring intangibles which are unidentifiable, have indeterminate lives, or are inherent in a continuing enterprise should be expensed as incurred. By contrast, such intangibles assets which are purchased must be carried at cost and amortized over their useful lives and cannot be written down or written off at date of acquisition.

It is advisable to emphasize that in the valuation of the stock of closely held corporations or the stock of corporations where market quotations are either lacking or too scarce to be recognized, all available financial data, as well as all relevant factors affecting the market value should be considered. The following factors, although not all--inclusive are fundamental and require careful analysis in each case EXCEPT:

A. The nature of the business and the history of the enterprise from its inception

B. The economic outlook in general and the condition and outlook of the specific industry in particular

C. The earning capacity of the company

D. The income-tax paying capacity of the company

The most appropriate application of the excess earnings method is for the purpose of:

A. Allocating total value between tangible and intangible assets

B. Estimating the net asset value

C. Estimating a normalized level of economic earnings

D. Quantifying the amount of access earnings