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Tom McCallum's first exposure to the world of business valuations left a vivid impression. Following the death of a client about 25 years ago, he watched as the estate hired an expert to determine the worth of the deceased person's business, which operated in three provinces.

Though Mr. McCallum was by then an accomplished certified general accountant, he was fascinated by the process.

"It was such a subjective and judgmental discipline," he recalls.

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Mr. McCallum earned his own chartered business valuator (CBV) designation in 1993, becoming one of the few professional accountants in Canada with a dual designation at that time.

He's never looked back. What makes the job professionally rewarding is that it takes everything he's been trained for as a professional accountant and brings it into a sharper focus, says Mr. McCallum, who is based in Whitby, Ont.

While he may have had little company 14 years ago, today more than 1,100 designated CBVs and about 800 students belong to the Canadian Institute of Chartered Business Valuators (CICBV), which was launched after the introduction of the capital gains tax in Canada in 1971.

"There's been a burst in the demand for CBVs," says Jeannine Brooks, the Toronto-based president and chief executive officer of the CICBV. "Last spring we had a 30-per-cent increase in the number of student registrations, compared to 2006."

One of the reasons for the increased demand was the introduction of new accounting standards for business acquisitions in 2002. Under the new rules, acquiring companies would have to provide a fair price for both the tangible and intangible assets of the businesses they acquired, says Iseo Pasquali, a partner with Deloitte & Touche LLP in Toronto and national leader of the firm's valuation services area.

"Prior to that any value paid above the fixed, or tangible, assets was booked to goodwill," says Mr. Pasquali, who received his CBV designation in 1996. "I think in the wave of Enron and some of the other issues around that time, North American accounting-standards boards wanted a bit more transparency around what was acquired."

The added demand for business valuation services has more than doubled the size of Mr. Pasquali's practice over the past three to five years, he says.

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Another factor accounting for the growth of CBVs is the large number of retiring baby boomers whose businesses must be valued for either sale or passing down to the next generation. An unparalleled intergenerational transfer of wealth is under way, often involving complex tax strategies such as estate freezes, says Mr. McCallum.

In addition, a sharp rise in the number of self-employed entrepreneurs coupled with a high divorce rate has "laid the groundwork for a field ripe for the picking," he says. In fact, much of Mr. McCallum's work focuses on provisions of the Family Law Act in Ontario which, he says, treats business interests as family property and thus subject to equalization payments when couples split.

Like Mr. McCallum, the majority of CICBV members - about three quarters - are professional accountants. In fact, the Canadian Institute of Chartered Accountants established a special CA-CBV designation in 2000. Many professional accountants who started off with larger firms now work in boutique firms that deal exclusively in business valuation.

One such firm is Siebert Pask Weston, based in Calgary. All three of its principals - Lorne Siebert, Brenda Pask and Mark Weston - are both CAs and CBVs.

Mr. Siebert and Ms. Pask started the firm in 2004. "We've been busy right from the start," says Mr. Siebert.

Another factor working in the favour of specialty valuation firms is that large accounting operations in the post-Enron world are sensitive to conflicts of interest that would arise if they were to mix audit responsibilities with other duties, so they pass off business valuation work to other companies.

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"It's a great time to be in business. It's just been a huge opportunity," Mr. Siebert adds.

CBVs also are active in mergers, corporate restructuring and litigation support. The designation is a magnet for somebody "who likes to be where the action is happening," says Ms. Brooks.

That is one of the strong appeals for Mr. Siebert, who has been a CBV since 1989. "What attracts me to it is you're dealing with owners and top management, helping them with issues that are generally beyond their grasp. It's high level stuff. People are relying on your expertise," he says.

But that level of excitement is also tempered by having to labour under tremendous pressure at times.

"You're often effectively putting your neck out on the line, telling people what you think in terms of what the value of a business is, or the amount of loss in a contract dispute. We're often dealing with lawyers and opposing valuators on the other side of the issue. So it can be adversarial, draining and very stressful," says Mr. Siebert.

Then there is the stress of seeking out new clients. Unlike steady audit work, which can be repeated on a yearly basis, when a business-valuation job is completed, that client "may never come back," Mr. Siebert says.

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The typical salary for a CBV ranges from about $80,000 a year to $200,000 and up, says Ms. Brooks. She notes, however, that the high starting salary is partly attributable to the fact such individuals are usually already mature professionals with an established track record, as opposed to somebody just embarking on their career.

What a valuator does

A business valuator calculates the worth of a company for litigation, mergers, acquisitions and other purposes. Here are the steps a valuator takes:

Performs an overall financial and operational analysis.

Interviews management to assess strengths and weaknesses.

Assesses the future earnings potential of a company by analyzing such factors as cash flow and earnings history.

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Analyzes the business assets and liabilities for potential redundancies that might add to or reduce value.

Compares the buyer's expected rate of return, such as the risk/return ratio, with projections derived by examining the company's anticipated future cash flows and other factors.

Corroborates values and other conclusions against those of comparable companies in the industry.

Jeff Buckstein

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