In the last post, we introduced the “traditional” levels of value chart with three distinct levels. In this post, we compare and contrast the traditional chart with a revised four-level (really three with the overlapping of marketable minority and financial control) chart.

In the initial post in this series on statutory fair value, we introduced the ideas that fair value is, in part, an equitable concept, and that appraisers are not in a position to make “equitable” decisions.

Appraisers cannot decide matters of equity, but we can provide good and clear valuation evidence to courts in statutory fair value matters. In this post, we will address what appraisers call “levels of value.” Courts are generally familiar with some of the concepts, but I do not believe that most courts are familiar with the growing understanding of the levels of value concept in the appraisal profession. This lack of understanding creates confusion and increases the difficulty of presenting valuation evidence in statutory fair value proceedings.

This is the first in a series of posts on the topic of Statutory Fair Value and Business Valuation. In this post, we examine the concept of statutory fair value, especially as it is defined in the state of Delaware as well as the difference between the concepts of “fair value” and “fair market value.”