A valuer must match the appropriate definition of value to the purpose for which the valuation was performed In the context in which the valuation is to be used is not critical and no lawsuit is in process, then the valuation analyst will always select fair value A valuation for buying a business will be the same as for selling the business. It is the nature of the business that defines the standard of value A valuation for securing a new loan should be the same as one in a divorce. The valuation is to be used only for the reason it was done and will likely be inappropriate for another use even by the same company or people. Fair market value is based upon: In business valuation, a legally created standard of value that applies to specific statutory transactions The market value, the standard of value applicable in cases of dissenting shareholders valuation rights. The value described by an arms length transaction between a knowledgeable wilting buyer and a knowledgeable willing buyer, neither are under compulsion to act The value described by an arms-length transaction involving a willing buyer or a willing seller and depends upon the reason you have been retained to perform a business valuation A buy-sell agreement avoids litigation notes that an independent valuation is to be performed, when and why identify when or what event triggers a buyout, identify how any buyout will be funded and identify the time of any buyout always identifies the interest rate, if any