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Financial ABV Exam
Accredited in Business Valuation (ABV) (Page 8 )

Updated On: 12-Jan-2026
Page 8 of 70
PDF with 344 Questions

The second step in capitalized excess earnings method is:

  1. Estimation of normalized level of earnings
  2. Quantifying the amount of excess earnings
  3. Capitalizing the excess economic earnings
  4. Estimating an appropriate direct capitalization

Answer(s): A



There are some allowable methods for determining the basis of property received in exchange for other property. Which of the following is/are out those methods?

  1. Income basis of tax on the property
  2. If a taxpayer receives property for services, then the original basis of the property when it is received is its original price
  3. The basis is the fair market value of the property exchanged for it, increased by any payments made or decreased by any payments received, when the two properties are of unequal value
  4. The basis is the fair market value of the property when its is received

Answer(s): C,D



Which of the following is the primary disadvantage of the asset accumulation method?

  1. If taken to an extreme, it can be very expensive and time consuming
  2. It may necessitate the involvement o appraisal specialists in several asset valuation disciplines
  3. The valuation requires the valuation of all the company assets
  4. The value of all assets, properties, or business interests depends on their economic income-generating capacity

Answer(s): A



Asset accumulation method can quickly quantify the effects on business value of many common seller structural considerations, such as:

  1. What if the seller retains the company's cash on hand or accounts receivables?
  2. What if seller does not retain (or leases back to the company) the operating real estate facilities?
  3. What if seller sells the title of the patents or to some other intangible asset owned by the company?
  4. What if seller does not legally retain any or all of the debt instruments?

Answer(s): A



This is sometimes considered the accumulation of all other elements of economic value of business enterprise not specifically with (or allocated to) individual tangible and intangible assts. Its analysis and qualification is an important component in the application of asset accumulation method to a company like Seller. What is this?

  1. Trademark
  2. Goodwill
  3. Patents
  4. Copyrights

Answer(s): B



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