MainStreetOS™ applies all five USPAP-recognized valuation methods to every engagement, weighting each by relevance to the subject business. The Uniform Standards of Professional Appraisal Practice require that all three valuation approaches be considered — and that any omitted approach be explained and supported. Our platform satisfies this requirement by default.
The Uniform Standards of Professional Appraisal Practice (USPAP), promulgated by The Appraisal Foundation and authorized by Congress in 1989, is the nationally recognized quality control standard for business valuation in the United States. Standards 9 and 10 apply specifically to business and intangible asset appraisals:
Governs how a business valuation is developed. Requires the appraiser to: identify the business being valued, specify the value standard (e.g., Fair Market Value), select appropriate valuation approaches (Income, Market, Asset), perform financial analysis and industry research, consider control and marketability factors, and determine the scope of work necessary to produce credible results.
Governs how business valuation results are communicated. Requires the report to clearly state all assumptions, sources of information, and analytical procedures. The appraiser must explain and support the inclusion or exclusion of any valuation approach. Two report types are recognized: the Appraisal Report (comprehensive, for external reliance) and the Restricted Appraisal Report (concise, client-only).
Additional professional standards recognized by MainStreetOS™: NACVA Professional Standards, AICPA SSVS VS Section 100, ASA Business Valuation Standards, and IRS Revenue Ruling 59-60.
USPAP requires all three approaches be considered in every business appraisal assignment. If an approach is omitted, the appraiser must explain and support the exclusion in the report.
Values a business based on its ability to generate future economic benefits. Converts projected earnings or cash flows into present value using risk-adjusted rates derived from the Build-Up Method.
Methods: Cap of Earnings, DCF
Best when: stable or projectable earnings exist and are the primary value driver.
Values a business by comparison to similar businesses that have sold. Uses pricing multiples derived from guideline transactions in the same industry. Relies on databases like DealStats, BizBuySell Comps, and BizComps.
Methods: Market Multiple, Rule of Thumb
Best when: sufficient comparable transactions exist in the subject industry.
Values a business based on the fair market value of its underlying assets minus liabilities. Most relevant for asset-intensive businesses, startups with limited earnings history, holding companies, and asset-purchase transactions.
Methods: Asset-Based (ANAV / Liquidation)
Best when: value is primarily in tangible/intangible assets, not earnings capacity.
The price at which the business would change hands between a willing buyer and a willing seller, both having reasonable knowledge of relevant facts, and neither being under any compulsion to act. This is the most common value standard in business appraisals.
Assumes the business will continue operating as an ongoing enterprise. Assets are valued in-place, as part of an operating business, not individually at liquidation prices.
The type and extent of research and analysis required for a specific assignment. Must be determined before the appraisal begins, agreed upon with the client, and documented in the report.
The specific date as of which the opinion of value applies. All market conditions, financial data, and assumptions are as of this date. USPAP requires every valuation to have a clearly stated effective date.
Assumptions directly related to the assignment that, if found to be false, could alter the appraiser's opinion of value. Must be stated prominently in the report.
The process of weighing the indications from multiple valuation methods and approaches to arrive at a final conclusion of value. USPAP requires the appraiser to explain and support the weighting applied to each approach.
Market Approach
What comparable businesses actually sell for — SDE and EBITDA multiples derived from completed transactions.
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🏦Income Approach
Stable, normalized earnings converted to value by dividing by a risk-adjusted capitalization rate.
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💰Income Approach
Projected future free cash flows discounted to present value using a build-up discount rate.
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🏗️Asset Approach
Fair market value of all tangible and intangible business assets minus liabilities.
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📏Market Approach
Industry-specific pricing benchmarks used as a cross-validation sanity check.
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USPAP requires the appraiser to reconcile the value indications from all approaches used, explaining the weighting applied. Agent 4 (FMV Synthesis) performs this reconciliation automatically:
Collect all five method results from Agent 3
Market Multiple, Cap of Earnings, DCF, Asset-Based, and Rule of Thumb indicated values
Analyze method agreement
Calculate dispersion, identify outliers, flag methods where data quality was limited
Apply confidence-based weighting
Weight each method based on data quality, relevance to subject business, and method reliability for the specific business type
Produce weighted FMV with range
Single-point weighted Fair Market Value plus a defensible low–mid–high range based on method dispersion
Document reconciliation reasoning
Explain and support the weighting applied to each method — satisfying USPAP Standard 10 reporting requirements
MainStreetOS™ runs all five valuation methods simultaneously, reconciles them with confidence-based weighting, and produces a USPAP-aligned report — in under 30 minutes.