University:
CFA Institute
Course:
CFA Chartered Financial Analyst
Academic year:

2023
Views:

27

Pages:

2
Author:

anon

CFA Level 2 - Equity Session 12-Reading 46 Private Company Valuation-LOS l 1. Which of the following best describes the implementation of private company valuation standards? A) Industry groups mandate compliance. B) Compliance is usually at the discretion of the appraiser. C) The federal government mandates compliance. Explanation: One of the challenges involved with the implementation of appraisal standards is that compliance is usually at the discretion of the appraiser because most buyers are still unaware of their existence. 2. Which of the following best describes the implementation of private company valuation standards? A) Appraisers voluntarily and periodically submit their reports for review by the local appraisal board. B) Appraisers are required to periodically submit their reports for review by the local appraisal board. C) Because most valuation reports are private, it is very difficult for appraisal organizations to ensure compliance to standards. Explanation: One of the challenges involved with the implementation of appraisal standards is that because most valuation reports are private, it is very difficult for the organizations to ensure compliance to the standards. 3. Which of the following best describes the guidance on the use of private company valuation standards provided by appraisal organizations? A) Guidance on the use of standards is not provided. B) Guidance on the use of standards is necessarily limited due to the heterogeneity of valuations. C) Technical guidance on the use of standards is widespread, as it is provided by both industry and consumer groups. Explanation: One of the challenges involved with the implementation of appraisal standards is that although the organizations provide technical guidance on the use of their standards, it is necessarily limited due to the heterogeneity of valuations.

Equity Session 12-Reading 46 Private Company Valuation-LOS l

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