In some cases, on-site inspections may not be possible, particularly in contentious situations such as divorce valuations, where access to the business premises may be restricted or the environment may be hostile. In these cases, a business valuator may face challenges in gathering firsthand information about the assets and operations. However, despite these limitations, the valuator is still obligated to make the best possible assessment based on the available information.
On-site inspections are sometimes of high importance, especially when large or high-value material assets—such as inventory, machinery, or specialized equipment—are involved.
While an on-site inspection provides valuable insight, in some cases, a more specialized, separate appraisal may be necessary. For example, machinery appraisers may need to be brought in for a detailed assessment of equipment or inventory that exceeds the valuation expertise of a business appraiser.
The ultimate goal of both on-site inspections and interviews is the same: to gain a thorough, real-world understanding of the business and they occur simultaneously.
This approach of bypassing comprehensive, on-site engagement contradicts the intent of IRS Revenue Ruling 59-60, which emphasizes the importance of direct, fact-based analysis rather than relying on generalized formulas or external data, like industry averages or compilations of studies that may not capture the specific dynamics of the business in question.
