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.

New data to compare intangible asset values and valuation methods

BVR’s recently released third edition of Benchmarking Identifiable Intangibles and Their Useful Lives in Business Combinations seeks to provide context for experts valuing intangibles after all the recent guidance, international regulatory action, and new standards.

Final global BV glossary available free from BVR, RICS, and other VPOs

The working group made up of representatives of the Royal Institute of Chartered Surveyors (RICS) and the International Valuation Standards Council (IVSC), as well as the American Society of Appraisers (ASA), the Saudi Authority for Accredited Valuers (TAQEEM), and the Canadian Institute of Chartered Business Valuators (CBV Institute), developed and released the new International Valuation Glossary—Business Valuation last month, which is intended to replace the glossary last published in 2001.

Latest issues of OIV Journal and the ASA’s Business Valuation Review available

The spring 2021 issue of the journal of the Organismo Italiano di Valutazione (OIV), the valuation standards-setter in Italy, contains the following articles.

High Court determines offshore trust scheme with multiple valuations can’t be cast off as a ‘mistake’

The last several months have seen multiple agreements designed to reduce international tax competition and minimise the abuses that result from offshore asset schemes.

How can business valuers support optimistic forecasts?

Valuation experts frequently receive forecasts that start modestly but accelerate dramatically in future years.

Dates for your diary

1-9 December: Practical Business Valuation, ICAEW live—online (four sessions) 09:30-12:30 BT ...

Long-term growth rate assumptions for terminal values can cause exit multiple mistakes

DCF models are becoming more accepted in UK business valuations, and several experts note that mistakes happen when analysts don’t consider the reasonableness of the implied long-term growth rate embedded in the selected exit multiple.

SME transaction values stay steady at 4.0x for 3Q2021

According to the latest issue of the DealStats Value Index (DVI), which calculates valuation multiples and profit margins from closely held companies each quarter, as shown in the table, EBITDA multiples are at 4.0x for the third quarter of 2021, which is unchanged from the rate in the second quarter of 2021.

UK job listings for contentious disputes managers and associates increase

BVWire—UK notes an increase in job postings for business valuation managers.

UK require more complete disclosures of beneficial ownership interests beginning in January

Global standards are hoping to create further disclosures of beneficial ownership of trusts and other entities to reduce cross-border fraud and tax avoidance.

iiBV update on-demand global BV core courses

BVR and the International Institute of Business Valuers (iiBV) have completed the current updates of their core Advanced Business Valuation course.

CFA Institute repeats support for continued goodwill impairment models

“Amortisation over a straight-line period tells you nothing."

Dates for your diary

8-11 November: IMAA’s Damodaran on Valuation, live—online ...

The largest UK divorce case settles again with few business valuation conflicts

Business valuation took a back seat to forensics in the new judgement from the High Court in the Akhmedova family drama, this time in a claim against the husband (Farkhad) and the son (Temur) who went out of their way to create “dishonest schemes” to place identified assets in jurisdictions beyond the reach of the UK courts or the wife (Tatiana).

Meet Kroll, a UK business valuation market leader

Duff & Phelps have grown to about 4,800 employees in 30 countries, with a leadership presence in the UK. Much of the growth has been through financial services acquisitions completed by its various private equity owners, including Kroll in 2018.

Small German study indicates greater understanding of business valuation among financial executives

Financial executives in the UK and EU are more likely to know that business valuation has its own set of professional standards.

Fair value terms in articles of incorporation take precedence over those in shareholder agreements

The founders of a financial advisory firm sold most of their holdings to a competitor but retained some shares and continued as directors and employees under a new shareholder agreement.

Virtual IVSC Annual General Meetings begin 21 October

This year’s annual general meeting (AGM) of the International Valuation Standards Council (IVSC) will be held as a virtual program from 21-28 October.

Dates for your diary

21-28 October: IVSC Annual General Meeting, virtual ...

HMRC closes family investment company review unit

HMRC closed down their “secret” specialist unit that was set up to review family investment companies (FICs) last month, concluding that they found no evidence linking the use of FICs with inheritance tax (IHT) noncompliance.

New model helps valuers understand how unrecognised intangibles skew future performance measures

Businesses in sectors where intangibles dominate tend to have higher observed values and returns—but this may have more to do with the accounting than underlying economics.

ESG is not an investment strategy and can lead to business valuation errors, Damodaran argues

BVWire—UK is not the only source questioning whether ESG rankings have a role in valuation theory or practice.

Since COVID-19, 43% of home appraisals have ‘down-valued’ purchases

Benham & Reeves, the London estate agency, reports that 43% of UK house sales since COVID-19 (through May 2021) were sold despite being down-valued by their RICS.

Best-practice examples in third FRC going-concern disclosure report emphasise business valuation

The Financial Reporting Lab of the Financial Reporting Council (FRC) has published its third thematic review of companies’ viability and going-concern disclosures, highlighting areas for improvement and offering examples of best practice.

The US takes on the valuation of Coca-Cola’s secret formula

Coke faces a more-than-$US 3 billion tax bill in a dispute over the valuation method used to determine the royalty charged to suppliers that provide the soda concentrate to bottlers—and the result of the case would impact transfer pricing taxes globally, given the brand’s reach.

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