Quick answer: A business valuation is only as defensible as the records behind it. The core package a forensic CPA needs is: three to five years of business tax returns and financial statements, interim financials through the valuation date, the general ledger and bank/credit-card statements, owner payroll and officer-compensation detail, related-party leases and loans, A/R and A/P aging, customer/contract and asset lists, debt schedules, and the ownership documents (operating or shareholder agreement, buy-sell, cap table). Each item proves a specific piece of the analysis — earnings, the right-date value, normalization adjustments, goodwill, and discounts. The more complete the records, the more defensible the value, and the less room the other side has to attack it.
This is a spoke of the hub on business valuation in a Florida divorce. It is the practical companion to the methodology spokes.
The core package — and what each item proves
1. Earnings base — 3–5 years of business tax returns and financial statements (income statement and balance sheet).
These establish the normalized earnings that most valuations capitalize into value. Several years let me separate a durable trend from a one-off year.
2. Right-date value — interim financial statements through the valuation date.
Because Florida lets the court value a business as of a date it finds just and equitable (see valuation date & standard of value), I need financials that reach that date — not just the last calendar year-end.
3. Verification and hidden personal spending — general ledger and business bank and credit-card statements.
These let me tie the financial statements to source records and identify personal or discretionary expenses run through the business — a core normalization adjustment (see normalizing owner compensation).
4. Owner compensation — owner W-2s, payroll registers, and officer-compensation detail.
This is the input for the reasonable-compensation analysis that drives both the value and the income available for support. Without it, the single most consequential adjustment is a guess.
5. Related-party dealings — leases, loans, and any transactions between the business and the owner or family.
Rent or interest above or below market distorts earnings; I adjust these to arm’s-length terms so the value reflects the business, not the family arrangements.
6. Working capital and collectibility — accounts-receivable and accounts-payable aging.
These show whether reported earnings are real and whether the receivables are collectible — both of which affect value and asset quality.
7. Goodwill transferability — customer and contract lists, customer-concentration detail, and any non-compete or employment agreements.
These are central to splitting personal versus enterprise goodwill — whether the business’s relationships would transfer to a buyer or walk out with the owner.
8. Tangible assets — fixed-asset and equipment lists with depreciation schedules.
These support the asset side of value and help identify depreciation add-backs.
9. Debt — loan and debt schedules with balances and terms.
Net value depends on the liabilities; the schedules let me state the value net of debt accurately.
10. Ownership and control — the operating or shareholder agreement, any buy-sell agreement, and the capitalization table.
These determine whether the interest is controlling or a minority stake and whether transfer restrictions exist — the facts that drive whether marketability or control discounts apply.
11. Benchmarks — any prior business appraisals, recent offers to buy, or financing valuations.
Prior independent valuations and real offers are useful reference points, and inconsistencies are worth understanding early.
Why completeness protects you
There is a direct line between the records and the strength of the opinion. Where the documents are complete, every adjustment ties to a source, every number is defensible, and the value holds up under cross-examination. Where they are thin, gaps get filled with assumptions — and assumptions are exactly what opposing counsel attacks. Producing a complete package early is the single most effective thing a party can do to keep the valuation clean, credible, and harder to contest.
A practical note: I keep client records confidential and analyze only what the engagement requires. The goal is a value the court can rely on, built on records that speak for themselves.
If you are an attorney preparing a Florida divorce that involves a closely-held business, Joey Friedman, CPA, P.A. provides a tailored document request and prepares the valuation from the records produced, statewide.
Related resources
- Hub: How a Forensic CPA Values a Business in a Florida Divorce
- Personal vs. Enterprise Goodwill in a Florida Divorce
- Equitable Distribution Analysis in a Florida Divorce
Frequently asked questions
What documents are needed to value a business in a divorce?
The core package is three to five years of business tax returns and financial statements, interim financials through the valuation date, the general ledger and bank statements, owner payroll and officer-compensation detail, related-party leases and loans, A/R and A/P aging, customer and asset lists, debt schedules, and the ownership documents (operating/shareholder agreement, buy-sell, cap table).
Why does the forensic CPA need several years of financials?
Several years let the analyst separate a sustainable earnings trend from a single unusual year, which produces a more reliable and defensible value than relying on one period.
What if some records are missing?
The valuation can still proceed, but gaps are filled with assumptions, which weakens the opinion and invites challenge. Producing a complete package early is the best way to keep the value defensible.
Will my business’s financial records stay confidential?
A forensic CPA keeps client records confidential and analyzes only what the engagement requires; the records support the opinion and are handled with appropriate care.
By Joey N. Friedman, CPA, ABV, M.Acc, MIB — President, Joey Friedman, CPA, P.A.