A Typical Practice Purchase

2 min. read

Business is valued in several ways. Knowing the different methods and the differences will help make the purchasing process smoother for you.

The following is useful terminology:

Fair market value (FMV) —is used when determining the value of tangible assets (like equipment and leasehold improvements). The term FMV assumes a “willing buyer and a willing seller,” what’s termed an “arms-length” transaction between unrelated parties, and includes depreciation. Determining market value of property (land and building) includes a comparison of other similar properties sold around or close to the same time as the property in question. Determining FMV of equipment involves an appraisal.

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