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Financial ABV Exam
Accredited in Business Valuation (ABV) (Page 3 )

Updated On: 12-Jan-2026
Page 3 of 70
PDF with 344 Questions

1. Direct capitalization
2. Yield capitalization
These above are the two categories of valuation methods under:

  1. Capitalization excess earnings method
  2. Income capitalization approach
  3. Market capitalization approach
  4. Cost approach

Answer(s): B



The income capitalization approach is based on the economic principles of:

  1. Risk and expected return investment analysis
  2. Anticipation
  3. Allowance of curable functional obsolescence
  4. Market value of building and improvements

Answer(s): A,B



Normally, the business will realize the economic benefit of the prepaid expenses within the normal course of one business cycle. Therefore, normally:

  1. Revaluation adjustment is required
  2. No revaluation adjustment is required
  3. No revaluation adjustment is required with respect to recorded prepaid expenses
  4. Revaluation adjustment is required with respect to recorded prepaid assets

Answer(s): C



Which of the following is NOT out of standard categories of assets for the purposes of applying the asset accumulation method?

  1. Financial assets
  2. Tangible personal property
  3. Real estate
  4. Equity and unearned earnings

Answer(s): D



1. Obtain or develop a cost-basis balance sheet
2. Determine which assets and liabilities on the cost-basis balance sheet require a revaluation adjustment
3. Identify off-balance sheet intangible assets or contingent liabilities that should be recognized and valued
4. Identify off-balance sheet or contingent liabilities that should be recognized and valued
5. Estimate the value of the various asset and liability accounts identified in steps 2 through 4
6. Construct a value-basic balance sheet, based on the indicated values concluded during step 1 through 5, and quantify the subject value
All these above statements are the steps of:

  1. Asset accumulation method
  2. Asset based approach
  3. Liquidity approach
  4. Market based approach

Answer(s): A



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