Valuation of ___________must be specified. For example, the assignment might include language such as” ...engaged to estimate the fair market value…

The question requires identifying the general category of items that must be specified in a valuation engagement, based on the provided example. The example explicitly lists "fixed assets, inventory, and goodwill." These are all distinct types of assets held by a business. Therefore, the valuation of assets must be specified to properly define the scope of the engagement. This ensures clarity for all parties involved regarding exactly what is being appraised, whether it's specific tangible assets, intangible assets, or a collection thereof, as part of a going concern or on a standalone basis.

B. Securities: The example lists tangible and intangible business assets, not financial instruments like stocks or bonds, which are classified as securities.

C. Cooperatives: A cooperative is a type of business entity structure, not the specific items (assets) being valued in the example.

D. Partnerships: A partnership is a form of business ownership. While one can value a partnership interest, the example lists the underlying assets, not the ownership interest itself.

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1. National Association of Certified Valuators and Analysts (NACVA), Professional Standards, Effective January 1, 2022. Standard 3.3, "Defining the Engagement," states, "The valuation analyst must, in the engagement letter or other agreement to provide valuation services, identify the subject interest to be valued..." The example in the question (fixed assets, inventory, goodwill) is a clear specification of the "subject interest," which in this case are specific assets.

2. Pratt, S. P., & Niculita, A. V. (2008). Valuing a Business: The Analysis and Appraisal of Closely Held Companies (5th ed.). McGraw-Hill. Chapter 3, "Defining the Valuation Engagement," emphasizes the necessity of clearly identifying the subject of the valuation. The text distinguishes between valuing an entire business enterprise, an equity interest (a security), or specific tangible or intangible assets. The question's example falls directly into the category of valuing specific assets.

3. International Valuation Standards Council (IVSC). (2022). International Valuation Standards (IVS). IVS 101 Scope of Work, paragraph 20.1(c), requires that the scope of work for a valuation engagement must identify "the asset or liability to be valued." The items listed in the question's example are all assets.