Valuation of ESOP

A valuation of an ESOP is generally more complex than a regular valuation of a business. An ESOP valuation must correctly incorporate all of the traditional business valuation issues, relating to fair market value, control premiums, liquidity discounts, tax pass through status, and other factors. In addition, the valuation of an ESOP should be able to withstand the potential of challenges by an employee or federal agencies, most importantly, the Internal Revenue Service (IRS) and the U.S. Department of Labor (DOL) with enforcement responsibility for ESOPs. The DOL has the responsibility for administering the ERISA regulations for ESOPs. These regulations add the "adequate consideration" standard to the fair market value standard of IRS valuation review.


Our valuation services are provided with complete independence. We do not offer any services related to the actual ESOP plan administration, adoption of the ESOP plan, or on-going ESOP administrative activities.