ABV Cheat Sheet 2026

The 30 highest-yield ABV facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Which of the following sources is commonly used by ABV practitioners to obtain industry financial ratios for benchmarking? → Risk Management Association (RMA) Annual Statement Studies
2. What regulatory compliance requirement applies to investment analysis? → Full compliance with all applicable federal, state, and industry regulations
3. Under ASC 350, goodwill impairment testing for public companies after the ASU 2017-04 simplification requires: → A one-step test comparing the carrying amount of a reporting unit to its fair value
4. Which economic concept best describes a situation where an industry's barriers to entry are very low? → Contestable market
5. How should regulatory compliance performance be reported to clients? → Provide accurate, complete, and timely performance reporting with appropriate benchmarks
6. What does the current ratio measure? → Liquidity
7. What regulatory compliance requirement applies to estate planning? → Full compliance with all applicable federal, state, and industry regulations
8. What does a rising interest rate environment typically imply for business valuations under the income approach? → Lower present values because discount rates increase
9. What fiduciary duty applies to estate planning? → Act in the client's best interest with loyalty, care, and full disclosure
10. How should a valuator handle conflicts of interest? → Inform the client and proceed with consent
11. What is included in the conclusion of value? → Final opinion supported by full analysis
12. What is the term for a company's durable competitive advantage that allows it to earn above-normal returns over time? → Economic moat
13. The 'greenfield method' is most often used to value which category of intangible assets? → Licenses and operating permits with long remaining terms
14. Which of the following best defines 'assembled workforce' in the context of purchase price allocation? → A contributory asset used in the MPEEM but not separately recognized under ASC 805
15. Which financial statement shows a company’s profitability over a period? → Income statement
16. In business valuation, when is WACC preferred over the equity discount rate (cost of equity) as the discount rate? → When valuing invested capital (MVIC) using debt-free cash flows such as FCFF
17. What continuing education requirement supports investment analysis competence? → Ongoing education in regulatory changes, market developments, and best practices
18. In the context of purchase price allocation, the 'cost approach' is most suitable for valuing: → Assembled workforce and certain software assets where replacement cost is estimable
19. What continuing education requirement supports financial planning competence? → Ongoing education in regulatory changes, market developments, and best practices
20. What does WACC stand for in the context of business valuation? → Weighted Average Cost of Capital
21. Which component is essential in a valuation report? → Purpose, methodology, and assumptions
22. The 'distributor method' is used in purchase price allocation primarily to value: → Customer relationships when the entity acts as a distributor of third-party products
23. What continuing education requirement supports risk assessment competence? → Ongoing education in regulatory changes, market developments, and best practices
24. Why is analyzing cash flow important in valuation? → It shows liquidity and earning quality
25. What fiduciary duty applies to tax strategies? → Act in the client's best interest with loyalty, care, and full disclosure
26. When estimating the useful life of a customer relationship intangible, which analytical approach is most commonly used? → Historical customer attrition or churn rate analysis
27. What regulatory compliance requirement applies to risk assessment? → Full compliance with all applicable federal, state, and industry regulations
28. Which metric is most commonly used to benchmark royalty rates when applying the relief-from-royalty method to technology intangibles? → Rates observed in arm's-length licensing transactions for similar technologies
29. What is the Capital Asset Pricing Model (CAPM) formula for the cost of equity? → Ke = Rf + Beta × (Rm – Rf)
30. Which organization issues the Statement on Standards for Valuation Services (SSVS)? → AICPA