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ABV PDF Practice Q&A's

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IFPUG ABV Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Valuation Adjustments and Special Topics15–20%- Discounts and premiums
- Tax considerations
- Valuation of debt and equity securities
- Valuation of intangible assets
Topic 2: Quantitative Analysis and Financial Statement Analysis20–25%- Financial statement adjustment and analysis
- Risk and return analysis
- Industry and economic analysis
- Statistical and quantitative methods
Topic 3: Valuation Applications and Reporting15–20%- Valuation report preparation and content
- Valuation for financial reporting
- Litigation and dispute support
- Business ownership transactions
Topic 4: Valuation Approaches and Methods30–35%- Income approach
  • 1. Discounted cash flow methods
    • 2. Capitalization of earnings
      - Asset-based approach
      • 1. Adjusted book value
        • 2. Net asset value methods
          - Market approach
          • 1. Guideline public company method
            • 2. Guideline transaction method
              Topic 5: Professional Responsibilities and Valuation Standards15–20%- Valuation standards and guidelines
              - Legal and regulatory considerations
              - Professional ethics and conduct

              IFPUG Accredited in Business Valuation (ABV) Sample Questions:

              1. The process of charging the cost of a natural resource to expense over the time during which it is extracted is called:

              A) Depletion
              B) Exhaustion
              C) Diminution
              D) Percentage Depletion


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

              A) All of the above
              B) Capitalization
              C) Anticipation
              D) Amortization


              3. S corporations, limited liability corporations, limited liability partnerships, family limited partnerships, professional corporations, real estate investment trust, investment companies registered under the investment company act of 1940 and personal holding companies are the examples of:

              A) General and limited partnerships
              B) Companies following valuation standards
              C) Cooperatives
              D) Entities' structures giving rise to special legal or tax considerations (specified structure)


              4. If the valuation date is other than a fiscal period end, the analyst may assess the adequacy of particular reserve for:

              A) collectible accounts
              B) individual asset valuation accounts
              C) uncollectible accounts
              D) equity accounts


              5. The business's capital requirements play a part in the valuation because they are an integral part of estimating net cash flow and dividend-paying capacity. Capital requirements include such items EXCEPT:

              A) Decreasing prepaid expenses
              B) Remedying deferred maintenance
              C) Capital expenditures
              D) Increasing working capital


              Solutions:

              Question # 1
              Answer: A
              Question # 2
              Answer: C
              Question # 3
              Answer: D
              Question # 4
              Answer: C
              Question # 5
              Answer: A

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