Small business owners we work with take pride in their early start up assets: a new office, company car, computers and technology. But when it comes to valuing those assets BE CAREFUL! Using estimates, measurements and other valuations of assets can be a sticking point during an audit. Items such as goodwill and other intangibles are under increasing scrutiny by financial auditors. A good rule is to discuss such times with your accountant and to keep those assets under a cap that might raise red flags.
Often business owners fall in love with their own assets and want to keep their asset estimates high. Truth is, that can really become an issue down the road – especially if the business is successful in the long run. No one wants a young company that is doing well to suddenly become hampered in an audit. At Foreman & Airhart we work closely with our small and mid-size business customers to ensure that they have a fair and defensible valuation strategy for their assets – real or intangible!