Highlights of the 21 June issue:
  • Putting a ‘tangible’ number on the value of human resources
  • The value of control trended lower in the UK last quarter
  • New edition of Business Analysis and Valuation: IFRS is released
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Follow the business valuation profession in the United Kingdom and its expanding role in regulatory, fiscal, contentious, and compliance valuations with BVWire–UK. Twice a month, BVWIre–UK delivers news and perspectives from valuation thought leaders, expert practitioners, academics, the High Courts, HMRC, the standard setters, and more. We’ll also keep you current on new business valuation research, methodologies, data tools, and training opportunities from ICAEW, RICS, BVR, and others. Contact us with news items and/or suggestions.

Leigh Miller says valuation ‘ranges’ still raise questions with auditors, even during COVID-19

Using multiple forecast scenarios has been a commonly practiced approach to market volatility—and many UK business valuers are now saying that it should be used more widely.

Dates for your diary

20-21 August: ICAEW Excel Modelling—Investment Appraisal, Valuation and Business Cases, virtual, 9:15-12:30 BST both days (repeated live 30 October and 4 December ...

Advising clients on the meaning of ‘fair value’

The phrase ‘fair value’ continues to bedevil the high courts and create very different expectations when parties are forced to figure out what to pay when buying and selling.

What’s control worth in the UK? A current example

Sources such as BVR/FactSet’s Control Premium Study (CPS) often support price premia above 25% as the assumed benefit of a controlling interest.

PwC valuation team completes restructuring deal for Travelex

PwC’s engagement to calculate the fresh capital needed to keep the remainder of ailing Travelex afloat has been completed with an agreement to provide £84 million.

D&P’s de Gray releases new financial damages guide for lost value calculations

Neil de Gray, a director in the Toronto office of Duff & Phelps, makes a strong argument for the use of business valuation professionals in any calculation of damages in his new guide The Financial Damages Model for Loss of Value, published late last month by Lexology.

IVSC confirm dates for next annual meeting and advisory forum meeting

The IVSC’s Advisory Forum Working Group (AFWG) is inviting representatives of IVSC member organisations to join their meeting on 28 September.

Sunak’s FinTech growth plans are now the subject of an independent review by HM Treasury

HM Treasury announced the relaunch of an independent review of the UK’s FinTech sector last week.

When market data are volatile, the best alternative is a more rigorous DCF

Quarterly economic indicators are barely sufficient for business valuers now.

How can you get BV CPD during COVID-19?

The short answer is ‘virtual.’

Can you simply reduce the value of all private companies in the UK? Scottish Mortgage and IPEV say yes.

Investment trust Scottish Mortgage, managed by Baillie Gifford, provided a simple solution in April by cutting the value of private companies in its portfolio to recognise the fact that private-company valuations are not insulated from public markets.

Adjusting the Gordon growth model for cross-border valuations

A new research study—‘International Valuation: A Proposed Method Using the Constant Perpetual Growth Model,’ by Thomas J. O’Brien (University of Connecticut—Department of Finance)—attempts to reduce valuation mistakes introduced by cross-border foreign exchange and cash-flow risks.

IVSC interviews head of European Financial Reporting Advisory Group

‘The valuation profession has always played an important role in the financial reporting process.'

Saudi businesses continue the transition to intangibles, say Deloitte

A new report from Deloitte Middle East and Saudi Authority for Accredited Valuers TAQEEM, ‘The Future of Intangible Assets in the Kingdom of Saudi Arabia,’ presents a comparative analysis with Tadawul, the Saudi Arabian stock index, to establish that ‘the Saudi Arabian economy is at the start of a similar transition’ as those experiences in UK and North American markets.

Dates for your diary

6 August: International Association of Certified Valuation Specialist Africa Charter (IACVS-Africa), Discounted Cash Flow Versus Capitalization of Earnings, free webinar, 15:00 BST ...

RICS host ‘Impact of COVID-19 on Global Business Valuation’ Town Hall tomorrow

The next in a long series of helpful free virtual panels occurs tomorrow evening 22 July.

How much less is a minority share worth now?

HMRC changes have increased the difficulty of providing support for rates of return for illiquid and difficult-to-market minority shares.

BV needs ‘outside-the-box’ solutions to document COVID-19-era business valuations

COVID-19 has substantially affected the financial and economic characteristics of privately held and publicly traded businesses.

IVSC interviews European Financial Reporting Advisory Group on new intangibles reporting issues and other topics

The new interview on the interaction between European views on IASB standard-setting and the valuation professions is now available from IVSC.

Dates for your diary

22 July: IVSC Standards Boards Update on Future Programmes, 14:00-15:00 BST, virtual conference call ...

Dates for your diary

10-13 July: ICVS-A Advanced Studies in Financial Instruments, virtual training ...

New BVU article notes increased use of discounted cash flow in UK business valuations

‘There had been a consistent thread running through UK Court decisions of a preference for broad professional judgement over mathematical precision,’ says Andrew Strickland (FCA) in his new analysis, which appears in the July issue of Business Valuation Update.

BVR/FactSet Control Premium Study updated for first quarter

The 1Q 2020 Control Premium Study report is now available, and we have updated the online FactSet Mergerstat/BVR Control Premium Study platform to include the latest analyses.

More concern about the validity of the size premium factor

Most business valuers consider a size premium when calculating cost of capital for financial reporting purposes.

How would a wealth tax impact business valuation?

The FT ran a long interview with Gus O’Donnell last week, saying that ‘a UK wealth tax is more likely than ever because of the reordering of politics caused by the coronavirus pandemic.’

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