The Business Appraisal Standards, published by the Institute of Business Appraisers (IBA), states in Standard Five that all assumptions and limiting conditions should be specified:

This valuation assignment (the “Assignment”), as stated in the Agreement (the “Agreement”) between Reliant Business Valuation LLC (the “Appraiser”) and the Client (collectively the “Parties”), is subject to the following assumptions and limiting conditions, as well as any other assumptions and/or limiting conditions contained in the Agreement, and any Intended User that relies on the information contained in the communication of the Assignment including, but not limited to, written communication (the “Report”) (either partially or entirely) explicitly agrees to such assumptions and/or limiting conditions:

  1. Acceptance and/or use of this valuation report (the Report”) constitutes acceptance of the following conditions, as well as any other conditions in the Engagement Letter/Agreement (the “Agreement”) between the Parties and/or in the Report to which this section is related. Terms utilized in the Agreement and/or Report shall have the same meaning herein, unless otherwise specifically noted.
  2. This is a Restricted Appraisal Report. This prominent use notice limits the use of the report to the Client, and only Intended User; use of this report by others is not intended by the Appraiser. The report may not contain supporting rationale for all of the opinions and conclusions set forth in the report.
  3. Facts relied upon in the Assignment including, but not limited to, Client, Intended User, Intended Use, are identified in the Agreement and/or the Report. The results of this Assignment shall only be used by the Client and/or any Intended User as identified in the Agreement and Report. Use of this report by any other person or entity is strictly prohibited.
  4. 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.
  5. 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,
  6. 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.
  7. 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.
  8. 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.” The Client has provided «48» months of historical financial statements. The Appraiser notes that there may be additional inherent risk in relying on only «48» months of financials (as opposed to the recommended five years/sixty months by the IRS).
  9. 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.
  10. 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.
  11. The appraiser reasonably disclaims liability for the analyses and opinions developed in this assignment and expressed in the Report, but should any such liability be determined by a court of competent jurisdiction, the extent of liability, in any way related to the Report, shall not exceed the amount paid to the Appraiser for the Assignment and, then, only to the intended user.
  12. Any controversy arising out of or relating to this report shall be settled by arbitration in accordance with the Agreement. In the unlikely event that differences concerning our services or fees should arise, which are not resolved by mutual agreement, the appraiser’s liability for this Assignment will be limited to fees paid.
  13. 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.
  14. 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.
  15. 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.
  16. 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.
  17. 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.
  18. 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.
  19. 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.
  20. 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.
  21. 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.
  22. 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 authorization of the Appraiser. 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.
  23. 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 authorization and approval of the Appraiser, which shall be at the sole discretion of the Appraiser.
  24. The Appraiser will review the [Draft] Purchase Agreement or Letter of Intent to Purchase if such document was made available to the Appraiser, but the Appraiser is not an attorney and has only relied on this document to extract certain deal terms, such as Buyer, Seller, Price, Allocations, Sale Type (stock or asset) and Non-Compete clauses. Any further analysis is outside of the scope of work of this Assignment. Similarly, a Lease may be reviewed only to determine the lease commencement and expiration dates, options to extend and approximate base or gross rental rates. All leases are assumed to have annual rental rate increases of 3% and are expected to have a total term (including options) of at least 10 years. No percentage rent has been accounted for unless specifically provided as part of the Facts & Data.
  25. An appraisal of fixed assets and/or real estate was not performed by Reliant Business Valuation, LLC. The Appraiser may rely on third party appraisal reports for estimated fair market values of real estate rent and/or fixed assets, if provided by the Information Provider. Where such values are used in this appraisal, no warranty is made with respect to these values. The Appraiser will attempt to only rely on USPAP compliant reports in which the Client is the intended user – although Reliant Business Valuation, LLC is not an intended user, the Client has authorized the Appraiser to utilize information from third party appraisal reports and therefore the Client assumes liability for the validity of such information. If values stated in relied-upon reports are incorrect, the resulting estimate of the value of the subject ownership interest may be affected. If a USPAP compliant equipment appraisal was not available, the Appraiser has relied on the net book value of fixed assets, which may not be reflective of their actual fair market value.
  26. 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. Information, estimates and opinions furnished the appraiser and contained in this report were obtained from sources considered reliable and believed to be true and correct, in accordance with appropriate valuation industry practices, and therefore the appraiser is neither responsible nor liable for the accuracy of such information, estimates and opinions.
  27. 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.
  28. «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.
  29. Matters of legal nature or tax consequences have not necessarily been considered in this report. The reader should consult a competent attorney or CPA for information and opinions in those areas.

1 Institute of Business Appraisers, Business Appraisal Standards, Sec. 5.3(h). Mandatory Content.
2Internal Revenue Service, Revenue Ruling 59-60, Sec. 4. Factors to Consider, paragraph. d.