Elements and Performance Criteria

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.
Legislative, industry and agency requirements may relate to:
access and equity policy, principles and practice
business and performance plans, including organisational goals and objectives
client service policies
industry and agency codes of conduct and practice, and code of ethics
legislative and statutory requirements for provision of business broking services
OHS policies, procedures and programs
organisational policy, guidelines and requirements
policies and procedures relating to own role, responsibility and delegation
privacy and confidentiality requirements
records and information systems
reporting and communication structures
terms and conditions of employment.
Enlisted professionals may include:
accountants
plant and equipment valuers
real estate agents
real estate valuers
solicitors.
Information sources may include:
annual reports
financial statements and account details
interviews with management, proprietors and other key personnel
market and industry sources external to the identified business
source documents
taxation records.
Current market data and trends:
may relate to:
business brokers' databases
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 impact upon the identified business or sector
market reports, analysis and commentary
municipal authorities
property leases
raw market data and trends
may be obtained from:
business consultants
clients
competitors
established media, industry analysts and commentators, publications and journals
industry.
Apparent or potential conflicts in collected information may arise from:
discrepancies within and between accounting and administrative records
historical financial records
projections for growth and expansion in comparison to actual growth and expansion.
Agency and industry legal and ethical requirements may be included in:
access and equity policy, principles and practice
Australian Competition and Consumer Commission requirements
Australian Securities and Investments Commission requirements
business and performance plans
court precedents
ethical standards
goals, objectives, plans, systems and processes
government statutes
industry self-regulation or licensing requirements
legal and organisational policies and guidelines
mission statements and strategic plans
OHS policies, procedures and programs
privacy and confidentiality requirements
quality and continuous improvement processes and standards
quality assurance and procedures manuals, including sales and client liaison procedure manuals.
Fully inspected would include:
internal and external inspection
physical attributes.
Key personnel could include:
cleaners and building supervisors
council and fire authorities
staff of the organisation.
Internal and external analysis and risk assessment may include:
internal:
assessing a business' overall strengths, weaknesses, opportunities and threats
background and history
depth of management
determining financial condition
evaluating tangible and intangible assets

historical financial trend analysis
identifying prior ownership sales
diversifying products and services
external:
competitive forces
economic and industry conditions
regulatory influences
locating possible guideline companies to be used in the market valuation approach.
Valuation methodology may include:
analysis of taxation considerations
applying the sanity test
asset based approach
data collection, including:
ownership details
plant, equipment, fixtures and fittings listings
financial accounts
lease and rent reviews
income, earnings and cash flow approach
normalising the accounts
recommended listing price of business
use of accepted valuation methods, such as:
build-up method
capitalised earning method
comparable sales method
excess earnings method
industry-adopted methods, such as rent rolls
use of accounting ratios
vertical, horizontal and trend analysis of financial statements.
Historical records may be normalised by:
adjusting balance sheet items to their fair market values
adjusting for discretionary items such as owner or family salaries and benefits
considering the potential value of non-recorded items
identifying non-operating and non-recorded items
removing non-operating and non-recurring income and expenses.
Identifiable variables may include:
analysis of personnel requirements, finances, plant and equipment, methods of operation and materials
asset management
market trends and projections
potential buyer interest
projected sales and revenue targets
tangible and intangible assets.
Valuation calculations should account for:
minority and marketability discounts
minority interests
tangible and intangible assets.
Records and documentation may include:
documents and pro formas for the client
forms and paperwork required by legislation and statutory regulation
internal documents required for the completion of the valuation process, including financial records.
Acceptable format may relate to:
agency expectations regarding the valuation report in relation to style, layout, formatting, syntax and grammar
industry expectations regarding the valuation report in relation to style, layout, formatting, syntax and grammar.
Valuation findings and rationale may cover:
financial data
organisation's history
present operations, including:
accounting
engineering
environmental and OHS concerns and regulations
equipment
facilities
inventory
management and organisational structure
marketing and competition
personnel
product lines and services
quality control
service record and systems
suppliers
valuation.

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 valuing a business for business broking purposes. 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 systems and finances, as they relate to valuing a business
clarifying concerns and communicating with clients to enable the valuation process and resolve complications
completing the valuation, documenting findings and making recommendations on improvements to future valuation procedures

knowledge of agency practice, ethical standards and legislative requirements associated with valuing a business
preparing and structuring advice on the valuation 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.