Global BV news: Valuations in China have evolved with the economy

BVWireIssue #152-3
May 20, 2015

BVWire had the honor of meeting a number of valuation professionals from China at the 2015 International Valuation Forum in Atlanta, sponsored by the International Association of Consultants, Valuators and Analysts (IACVA). Madame Liu Ping (China Appraisal Society), vice chairman of IACVA, addressed the group, and Yonghua Ruan (China Enterprise Appraisal) gave a presentation on brand valuation.

Xiaohong Li (China Appraisal Associates) told the audience that most business valuations in China are done by very large firms. In the beginning, valuations were done using only the cost approach, but now all three methods are used. There are 30,000 valuation professionals in China, and different licenses are granted for valuing state-owned assets and public companies. Valuators play a big role in M&A of state-owned assets.

The Chinese economy has evolved into a “new normal,” according to Li, and now focuses on innovation and Internet-related technology. Companies have moved from heavy investments in fixed assets to intangible assets and technology. Therefore, valuation engagements have become more complicated. There is also a ministry for quality, known as the Quality Assessment Board, that seeks to put a value on brands, so consumers will be able to identify the quality difference between one brand and another.

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