NTISthis.com

Evidence Guide: CPPDSM4029A - Appraise business

Student: __________________________________________________

Signature: _________________________________________________

Tips for gathering evidence to demonstrate your skills

The important thing to remember when gathering evidence is that the more evidence the better - that is, the more evidence you gather to demonstrate your skills, the more confident an assessor can be that you have learned the skills not just at one point in time, but are continuing to apply and develop those skills (as opposed to just learning for the test!). Furthermore, one piece of evidence that you collect will not usualy demonstrate all the required criteria for a unit of competency, whereas multiple overlapping pieces of evidence will usually do the trick!

From the Wiki University

 

CPPDSM4029A - Appraise business

What evidence can you provide to prove your understanding of each of the following citeria?

Research the market.

  1. Appropriate information is identified and organised in a format suitable for analysis according to legislative and agency requirements.
  2. Business technology is used to access and organise information according to agency requirements.
  3. Market information is processed and analysed to assist in making an assessment of the listed business' marketability and viability.
  4. Current business financial data is collected and evaluated to determine financial status according to agency requirements.
  5. Current market value of business assets and trends for similar businesses are obtained and analysed to establish benchmarks.
  6. Client is informed of relevant current market factors and their potential impact on the business' sale or purchase price according to agency requirements.
Appropriate information is identified and organised in a format suitable for analysis according to legislative and agency requirements.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Business technology is used to access and organise information according to agency requirements.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Market information is processed and analysed to assist in making an assessment of the listed business' marketability and viability.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Current business financial data is collected and evaluated to determine financial status according to agency requirements.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Current market value of business assets and trends for similar businesses are obtained and analysed to establish benchmarks.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Client is informed of relevant current market factors and their potential impact on the business' sale or purchase price according to agency requirements.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Appraise the business.

  1. Sourceandoccupancy documents are obtained and analysed according to legislative and agency requirements.
  2. Ownership and status of the business and relevant associated components are determined in line with statutory and agency requirements.
  3. Profitability of the business and associated components is determined using appropriate appraisal practices according to agency requirements.
  4. Market-related pricing structures are determined and assessed against buyer and seller expectations.
  5. Feedback is collated and provided to personnel and agencies involved in the appraisal process.
  6. Recommendations are made to the client regarding purchase or selling price according to agency requirements and procedures.
Sourceandoccupancy documents are obtained and analysed according to legislative and agency requirements.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Ownership and status of the business and relevant associated components are determined in line with statutory and agency requirements.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Profitability of the business and associated components is determined using appropriate appraisal practices according to agency requirements.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Market-related pricing structures are determined and assessed against buyer and seller expectations.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Feedback is collated and provided to personnel and agencies involved in the appraisal process.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Recommendations are made to the client regarding purchase or selling price according to agency requirements and procedures.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Complete appraisal.

  1. Appraised price is determined on the basis of the appraisal and negotiated with the client.
  2. Conclusions and recommendations are prepared from source documents that provide constructive advice for future appraisals.
  3. Records and documentation are completed according to client and agency requirements.
Appraised price is determined on the basis of the appraisal and negotiated with the client.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Conclusions and recommendations are prepared from source documents that provide constructive advice for future appraisals.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Records and documentation are completed according to client and agency requirements.

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Assessed

Teacher: ___________________________________ Date: _________

Signature: ________________________________________________

Comments:

 

 

 

 

 

 

 

 

Instructions to Assessors

Evidence Guide

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, the range statement and the Assessment Guidelines for this Training Package.

Overview of assessment

This unit of competency could be assessed through practical demonstration of appraising a business. Targeted written (including alternative formats where necessary) or verbal questioning to assess the candidate's underpinning knowledge would provide additional supporting evidence of competence. The demonstration and questioning would include collecting evidence of the candidate's knowledge and application of ethical standards and relevant federal, and state or territory legislation and regulations. This assessment may be carried out in a simulated or workplace environment.

Critical aspects for assessment and evidence required to demonstrate competency in this unit

A person who demonstrates competency in this unit must be able to provide evidence of:

analysing the business and associated plant and equipment and finances, as they relate to appraising a business

clarifying concerns and communicating with clients to enable the appraisal process and resolve complications

documenting agreements and distributing relevant documents and information to clients and other relevant internal and external parties

knowledge of agency practice, ethical standards and legislative requirements associated with appraising a business

preparing and structuring advice on the appraisal process.

Context of and specific resources for assessment

Resource implications for assessment include:

access to suitable resources and simulated or real opportunities to demonstrate competence

assessment instruments that may include personal planner and assessment record book

access to a registered provider of assessment services.

Where applicable, physical resources should include equipment modified for people with disabilities.

Access must be provided to appropriate learning and/or assessment support when required.

Assessment processes and techniques must be culturally appropriate, and appropriate to the language and literacy capacity of the candidate and the work being performed.

Validity and sufficiency of evidence require that:

competency will need to be demonstrated over a period of time reflecting the scope of the role and the practical requirements of the workplace

where the assessment is part of a structured learning experience the evidence collected must relate to a number of performances assessed at different points in time and separated by further learning and practice with a decision of competence only taken at the point when the assessor has complete confidence in the person's competence

all assessment that is part of a structured learning experience must include a combination of direct, indirect and supplementary evidence

where assessment is for the purpose of recognition (RCC/RPL), the evidence provided will need to be current and show that it represents competency demonstrated over a period of time

assessment can be through simulated project-based activity and must include evidence relating to each of the elements in this unit.

In all cases where practical assessment is used it will be combined with targeted questioning to assess the underpinning knowledge. Questioning will be undertaken in such a manner as is appropriate to the language and literacy levels of the candidate and any cultural issues that may affect responses to the questions, and will reflect the requirements of the competency and the work being performed.

Required Skills and Knowledge

This section describes the essential skills and knowledge and their level, required for this unit.

Required skills:

determine most appropriate appraisal methods

identify and analyse current market trends and positions

interact with clients and resolve their concerns and issues

obtain information relevant to appraising a business and provide information on the appraisal process and final appraisal

reading skills to access and interpret a variety of information relating to appraising a business and relevant information regarding legislative requirements

relate to people from a range of social, cultural and ethnic backgrounds and of varying physical and mental abilities

select and use appropriate technology.

Required knowledge and understanding:

agency's business structure

basic accounting principles, such as double entry bookkeeping and accrual accounting

interpretation of financial data and reports, including comparative balance sheets, budget sheets and profit and loss statements

mechanisms to obtain and analyse client comments and feedback

organisation's policy and procedures for client service, including ethical behaviour and listing procedures

principles and techniques for checking and validating financial statements and the ownership and status of a business and associated plant and equipment

principles and techniques for communicating concerns to clients

relevant federal and state or territory legislation and local government regulations related to:

anti-discrimination

business operation and listings, especially in regard to franchises and business structures, and the sale and appraisal of businesses

consumer protection

environmental issues

equal employment opportunity

financial probity

industrial relations

OHS

service standards and agency requirements

strategies for planning and monitoring appraisal activities

types of appraisal methodologies, principles and techniques for valuing a business, and benefits and limitations of each for a variety of business types.

Range Statement

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording in the performance criteria is detailed below. Add any essential operating conditions that may be present with training and assessment depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts.

Appropriate information may be obtained from sources such as:

business brokers and valuers

business consultants

clients

court decisions

databases

established media and industry analysts and commentators

other similar businesses

the business

the industry.

Legislative and agency requirements may relate to:

access and equity policy, principles and practice

business and performance plans, including organisational goals and objectives

industry and agency codes of conduct and practice and code of ethics

provision of business broking services

mission statements

strategic plans

OHS policies, procedures and programs

organisational policies, guidelines and requirements

policies and procedures relating to own role, responsibility and delegation

privacy and confidentiality requirements

quality assurance and procedures manuals, including sales and client liaison procedure manuals

records and information systems

reporting and communication structures.

Business technology may include:

computer software used to store and access data, including:

database applications, including spreadsheets

word processing applications

internet

intranet.

Market information may include:

current market information

demographic data, such as size, nature of industry, shifts in usage and uptake rates

economic conditions and business confidence levels

global and local issues that may affect the identified business or sector

market reports, analysis and commentary

opposition and competition

raw market data and trends.

Financial data may include:

balance sheets

bookkeeping, accounting, stock and job costing records

business capital

cash flow forecasts

financial budgets

profit and loss statements.

Source and occupancy documents may relate to:

source documents:

financial statements

franchise agreements

plant and equipment inventories

occupancy documents:

body corporate and strata agreements

leases

statutory paperwork, such as incorporation documents.

Associated components may include:

equipment

intangible assets, such as goodwill

intellectual property, such as:

patents

trademarks

liabilities

other tangible assets, such as:

plant

stock

work in progress.

Appraisal practices may include:

applying the sanity test

asset-based

data collection relating to:

equipment

financial accounts

fixtures and fittings

lease

listings

ownership details

plant

rent reviews

normalising the accounts

recommended listing price of business

structure of lease

use of accepted valuation methods, such as:

backup method

build-up method

capitalised earning method

comparable sales method

discounted cash flow method

excess earnings and super profit method

industry adopted methods, such as rent rolls

summation method

use of accounting ratios

vertical, horizontal and trend analysis of financial statements.

Market-related pricing structures may relate to:

client financed sale

encumbered or unencumbered

method of sale (e.g. auction or direct purchase)

plant and equipment as separate sales

pricing for sale of business as a whole or in component parts

staggered purchase and/or retention arrangements

tax implications.

Feedback may include:

formal and informal discussions with existing and previous clients

information from potential buyers

information provided by others involved in the appraisal process, both internal and external to the organisation.

Recommendations may relate to:

conditions of tenure

current market prices

equipment and plant

fittings and fixtures

goodwill

liabilities

other assets

ownership arrangements

terms and condition of sale and listing.

Appraised price refers to a realistically determined buying or selling price that takes account of:

current market price tolerances

terms of sale, including timeframes and conditions

valuation of the business.

Conclusions and recommendations may relate to:

business structure and ownership

market expectations

marketing options

plant and equipment sales

price and pricing structure

valuation and appraisal.

Records and documentation may include:

documents and pro formas for the client

forms and paperwork required by legislation and statutory regulations

internal documents required for the completion of the appraisal process.