VI study guide
VI · Work through your exam, one topic at a time.
The VI (Valuation Analyst) credential is aimed at professionals who assess the worth of businesses, intangible assets, and tangible or financial holdings, and who need to defend those conclusions in reports, transactions, and review settings. Candidates typically come from corporate finance, audit and assurance, investment research, private practice advisory, or in-house strategy teams. The VI study guide has 5 sections and about 1,539 words.
01Valuation Principles and Professional Standards
Valuation is a discipline of standards, definitions, and judgment , not a formula exercise. Candidates must know the difference between value definitions : fair market value (a hypothetical, arm's-length transaction between informed, willing parties, neither under compulsion), fair value (an accounting term, often an exit price in an orderly market), investment value (buyer-specific), and intrinsic value (analyst's judgment of worth).
348 words, about 2 min02Financial Reporting and Accounting Concepts
Candidates must translate accounting statements into economic value. Know the balance sheet identity (assets = liabilities + equity), the difference between book value and market value , and how fair value measurement under accounting standards uses a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs), Level 3 (unobservable inputs).
302 words, about 2 min03Valuation Approaches and Methods
Every valuation draws from the income, market, and cost approaches . The income approach discounts expected future benefits to present value; the market approach derives value from comparable transactions or guideline public companies; the cost approach estimates replacement or reproduction cost less depreciation.
305 words, about 2 min04Valuation of Businesses and Intangible Assets
Candidates must distinguish enterprise value (whole business, debt-free) from equity value (residual to shareholders). The bridge is: equity value = enterprise value − debt + cash (adjusting for nonoperating assets and liabilities).
298 words, about 1 min05Valuation of Tangible and Financial Assets
For real estate, machinery, and equipment, the cost approach (replacement or reproduction cost less physical, functional, and economic obsolescence) is central, alongside the sales comparison and income approaches. Know the three obsolescence types: physical deterioration (wear and tear), functional obsolescence (inefficiency or excess capacity relative to modern alternatives), and economic obsolescence (external factors such as location or market decline).
286 words, about 1 min