Calculation, Estimate or Comprehensive? An Accountant’s Guide to Valuation Reports

A client tells you they need a business valuation. The next question is often: what type of valuation report do they need?

The main difference between the three levels is the depth of work the valuator performs, including the extent of review, inquiry, analysis and independent corroboration of significant information. A Calculation conclusion involves a less extensive scope of work, an Estimate more, and a Comprehensive the most. That is accurate, but it does not tell an accountant which level suits a particular client. This guide does.

The terminology changed, but the central question remains

Many accountants and owners know the terms Calculation Valuation Report, Estimate Valuation Report and Comprehensive Valuation Report. The standards effective January 1, 2026 describe three levels of Valuation Conclusion. A written communication containing an independent valuation conclusion is a Valuation Report. The three levels are still Calculation, Estimate and Comprehensive.

The distinction is useful because the level describes the valuator’s scope of work, not the length or look of the final report. A short report does not necessarily mean limited work, and a long one does not prove extensive verification. The engagement terms, the procedures performed and the evidence obtained determine the level.

All three levels must be credible and properly supported

A Calculation is sometimes described as a rough valuation or an inexpensive estimate. That can be misleading. All three levels must produce a credible and properly supported valuation conclusion, and the valuator must apply professional judgment and an appropriate scope of work. The difference is the depth of that work.

Under the current standards, the scope of work at every level involves review, inquiry, analysis and independent corroboration of significant relevant information. The extent of those procedures changes by level. A Calculation conclusion can rely more heavily on client representations, include less independent corroboration and use reasonable simplifying assumptions for some inputs. It is still a professional valuation conclusion prepared under CBV standards.

Comparing the three levels

This is a general comparison, not a rule assigning a level to each purpose. A Calculation is not automatically suitable because the shareholders agree with each other, and a Comprehensive is not automatically required because the business is large. The valuator must consider the full circumstances.

The level does not determine the valuation method

The three levels should not be confused with the three main valuation approaches: income, market, and cost or asset. A Calculation is not limited to applying a multiple, and a Comprehensive does not require every possible method. At every level, the valuator must consider the approaches and methods that are relevant and appropriate in the circumstances, then select the ones that give a credible conclusion. Depending on the business, that could be capitalized cash flow, discounted cash flow, capitalized earnings or seller’s discretionary earnings, guideline transactions, adjusted net asset value or another suitable method.

One method can be enough where it gives a reliable indication of value. More than one may be used when it improves the assessment or provides a reasonableness check. For a fuller explanation of methods and normalized earnings, see how a CBV values a small business.

The purpose and intended users come first

Before discussing report levels, ask two questions: why is the valuation needed, and who will rely on it?

Purposes include a shareholder buyout, an estate or succession matter, a corporate reorganization, tax planning, a sale or acquisition, financing, divorce or family law, internal planning, or a dispute. Users can include the owner, other shareholders, the company, the accountant, legal counsel, an executor or beneficiary, a lender, the Canada Revenue Agency, or a mediator, arbitrator or court. For an overview of the situations that lead to a valuation, see when you need a business valuation.

The same company may need a different scope depending on the intended use. A valuation prepared for one owner’s internal planning may not suit a disputed buyout, and a report prepared for a specific tax transaction should not automatically be reused for a later sale or financing request. The engagement agreement and the final report should identify the purpose, intended use and intended users.

Three examples

Information limitations are not the same as a limited scope

A Calculation has a deliberately less extensive scope of work. A scope limitation is different: it arises when significant relevant information is denied, unavailable or unreliable, and it can occur at any level. Missing current financial statements, for example, affect a Calculation, an Estimate or a Comprehensive equally. Choosing a Calculation does not solve the underlying information problem.

Significant inputs and assumptions must be supported at every level. If one cannot be supported, the valuator must disclose it as a scope limitation. If a limitation is serious enough to jeopardize the credibility of the conclusion, the valuator must not issue the conclusion. Accountants can help by identifying missing information before the engagement begins.

What independent corroboration can involve

Independent corroboration means examining significant information rather than simply accepting a representation at face value. Depending on the engagement, the valuator may compare the financial statements with the corporate tax returns, review underlying ledger accounts, examine compensation data, assess lease terms against market rent, compare forecasts with past performance, review customer contracts, research industry and economic conditions, examine prior transactions or offers, review outside equipment or real estate appraisals, compare valuation inputs with market evidence, and discuss significant assumptions with management and advisers. The extent of this work increases from Calculation to Estimate to Comprehensive.

Independent corroboration is not an audit. A business valuation and a financial statement audit serve different purposes.

Why fees differ

A higher level generally requires more work, but the level is only one factor in the fee. Others include the number of entities, the share structure, the quality of the records, the number of years analyzed, any need to reconstruct historical information, the reliability of forecasts, related-party transactions, specialized assets, the number of intended users, disputed facts or assumptions, deadlines, and expected meetings or revisions. A straightforward Estimate can take less work than a difficult Calculation with incomplete records. See what a business valuation costs for our pricing and the factors behind it.

Can the level change during the engagement?

Yes. An engagement may start with the expectation that a Calculation will be suitable, and then the valuator finds complex share rights, unreliable records or significant disputed assumptions, so the expected scope is no longer appropriate. The reverse can also happen, provided the scope stays appropriate for the purpose and intended users. Significant changes to the engagement terms must be documented and agreed in writing. Discussing these possibilities at the start avoids surprises for the client.

What if litigation or a dispute is expected?

Tell the valuator right away. A valuation prepared for negotiation may differ from work prepared for litigation, expert evidence or a formal dispute process, and CBV Institute has separate standards for expert reports in litigation and disputes. The valuator also needs to consider independence, intended users, procedural requirements and the likelihood of testimony or cross-examination. Do not assume an existing Calculation report can become expert evidence by changing the cover page. Legal counsel should help define the assignment before substantive work begins.

A practical selection guide

These questions help frame the discussion. They do not replace the valuator’s professional judgment.

The central question is whether the scope is enough to produce a credible conclusion for the identified purpose and users.

Frequently asked questions

Is a Calculation a “rough” valuation?

No. Under the CBV Institute standards, every level, including a Calculation, must be credible and properly supported. A Calculation has a less extensive scope, with less independent corroboration and more reliance on client information.

Does a tax or estate freeze matter need a Comprehensive report?

Not automatically. The level depends on the purpose, the users, the quality of the information and the expected scrutiny. The valuator recommends a level and confirms it in writing.

Is the difference between the levels the length of the report?

No. The level describes the scope of work performed, not the length or appearance of the report.

Can a Calculation be used if records are missing?

Missing or unreliable records are a scope limitation at any level. Choosing a Calculation does not fix them, and if a limitation would jeopardize the credibility of the conclusion, the valuator must not issue one.

Can the level change after the engagement starts?

Yes, if the valuator finds that the expected scope no longer fits. Significant changes to the engagement terms are documented and agreed in writing.

Referring a valuation file to Acadia Hill

Acadia Hill Capital Advisors provides business valuation services for accountants, business owners and legal advisers in Winnipeg, across Manitoba and, remotely, in Saskatchewan. A brief first conversation is usually enough to identify the likely scope, the information needed and the next steps. Contact Acadia Hill to discuss the right valuation engagement for your client.

This article provides general information. The appropriate valuation scope depends on the purpose, intended users, available evidence and specific circumstances of the engagement.