A Third-Party Appraisal is a formal business valuation conducted by an independent advisory firm. Valuation professionals use a number of techniques to assess the value of a privately held business. Valuation purposes include determining the price for a sale, estate and gift tax planning, divorce settlements, employee stock ownership plans and buy-sell agreements. It is also possible to use an appraisal to establish the value to be used in a phantom stock plan. However, companies should be careful to avoid using appraisals designed to focus on a specific event (such as gift tax planning) when setting the price for a phantom stock program as such a determination may or may not reflect the characteristics of value the business is seeking to promote with the plan participants.