A lack of empirical data on small private companies outside the U.S. makes valuations challenging. It’s a “real problem,” noted Andrew Neuman, a valuer in Canada. Speaking at the NACVA 2021 Business Valuation and Financial Litigation Hybrid and Virtual Super Conference, he pointed out that, because of the dearth of data, more professional judgment is necessary.

One idea: A valuer who practices mostly in Australia, Morris Kaplan, agreed with Neuman. So what do you do? In one case in Australia, Kaplan used U.S. data in developing his buildup method—and he was not challenged on it when he testified in court.

Kaplan also gave kudos to the global research Pablo Fernandez (University of Navarra—IESE Business School) did on the equity risk premium and risk-free rate used in various countries (see the latest research here).