Current news on the business valuation profession in the UK
Business Valuation Resources (BVR) recently launched a free ezine that follows the business valuation profession and its expanding role in regulatory, fiscal, contentious, and compliance valuations in the United Kingdom.
BVWire–UK delivers news and perspectives from valuation thought leaders, expert practitioners, academics, the High Courts, HMRC, the standard setters, and more. Stay current on new business valuation research, methodologies, data tools, and training opportunities from ICAEW, RICS, BVR, and others with a free subscription to BVWire—UK.
Read the most current issue and catch up on past articles, including:
- What is acquiring control worth in the UK?
Quite a bit, it turns out—30%. Current data (including Q1 2019 updates) from the FactSet Mergerstat/BVR Control Premium Study (CPS) show that UK buyers value the future benefits of controlling interests higher than nearly anywhere else in the world. Read more >>
- European real estate valuers continue the process of creating new EU business valuation standards
UK business valuers who are already members of (or well familiar with) RICS might get a sense of deja vu from the news that The European Group of Valuation Associations (TEGoVA) held the first meeting of the business valuation standards committee in Dubrovnik last week. TEGoVa chairman Krzysztof Grzesik, FRICS REV, notes that ‘[f]ifteen of our EU-member valuation associations already offer business valuation specialisations.’ Read more >>
- New IVS business valuation guidance on nonfinancial liabilities on schedule for next month
‘Nonfinancial liabilities is one area where very little if anything has been published by any other valuation body,’ says Andreas Ohl, chair of the IVSC Business Valuation Board. ‘It’s not just a gap in our standards; it’s frankly a gap in the profession overall.’ His committee is in the final stages of adjusting their exposure draft for IVS based on many comment letters received. Read more >>
- First meeting in international financial instruments valuation board held in London
Various efforts to set standards for the valuation of financial instruments have been attempted, but ‘investors, regulators, chartered accountants, and the banks are unified since the last financial crisis,’ says Gavin Francis, HSBC’s chief accounting officer in London and past technical director of the IASB. Francis is chair of the newest International Valuation Standards Council (IVSC) division, the Financial Instruments Standards Board. Read more >>
- New cases suggest British Common Law may be emphasizing ‘fairness’
‘Common law is shifting under our feet, so this is an interesting time to do valuations in contentious situations, whether it’s a family or nonfamily situation,’ Andrew Strickland said recently. Strickland, who follows UK legal decisions carefully in his practice, also spoke on the topic to a group of 80 UK business valuators at last month’s ICAEW business valuation special interest group’s spring meeting. Read more >>
- University of Bath professors document problems with goodwill in purchase price allocations
Researchers from University of Bath, working in conjunction with a team at the University of Hong Kong, find that investors underreact to high goodwill-to-sales ratios. In The Invisible Burden: Goodwill and the Cross-Section of Stock Returns, the research shows stocks with high goodwill-to-sales ratios underperform for the first three years after acquisition, compared to their peers. Not surprisingly (except apparently to investors), firms with higher goodwill are more likely to experience impairment—and they’re less profitable.
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