Valuation of corporation on inventory and appraisement

[anikolop]

What is the name of your state? TX

On an inventory and appraisement for an independent administration, it is listed that the decedent owned a certain number of shares of common stock in a small incorporated business which represents a 5% interest. That interest in turn was assigned a dollar value. Is this how an interest in a corporate entity is valued? I'm confused as to the actual value of a business and the value of the shares in the business. Are they both the same thing? For purposes of considering the property of the decedent, is this the proper way to valuate his interest?

 

[seniorjudge]

What is the name of your state? TX

On an inventory and appraisement for an independent administration, it is listed that the decedent owned a certain number of shares of common stock in a small incorporated business which represents a 5% interest. That interest in turn was assigned a dollar value. Is this how an interest in a corporate entity is valued? I'm confused as to the actual value of a business and the value of the shares in the business. Are they both the same thing? For purposes of considering the property of the decedent, is this the proper way to valuate his interest?

Q: Is this how an interest in a corporate entity is valued?

A: Yes; the stock is inventoried at the value as of the date of death of the decedent. That is the only thing the personal representative has to go by when determining the value of the business interest.

 

[nextwife]

I'm wondering about accounts payable and accounts recievable.. If the debt owed by the Corp., for example, exceeded the inventory OWNED, then the value of the inventory is NOT a true representation of the value of the interest. Also, if the inventory is not yet fully paid for, the amount on account should perhaps be deducted from the inventory value (example, a huge shipement was checked in, but the vendor had offered "terms" and so thre inventory was not fully paid for was of date of death.