Not only is an independent valuation a good idea when getting involved in a transaction, it is also a statutory requirement in many circumstances that involve Employee Stock Ownership Plans, Estate/Gift Taxes, Charitable Contributions or, most recently, the granting of Stock Options. And, in most circumstances, a solid independent valuation can be an insurance policy against tax assessments and accuracy-related penalties.

In view of the complexities of the financial accounting and federal tax rules governing ESOPs, many ESOP sponsoring companies lose sight of larger issues and become buried in the technical details of their ESOP and remain fixed on a single use for their ESOP. Short term benefits of a particular ESOP strategy should not overshadow longer term objectives of the company and alternative uses for their ESOP should be addressed every couple of years.