How should information in a valuation be evaluated?
In the upcoming January issue of Business Valuation Australia (subscription required), John Gibson, fellow of Chartered Accountants Australia and New Zealand, shares what constitutes reasonable grounds or sufficient evidence in the context of a valuation.
“While judgement is required in the selection and application of the valuation methodology, in my experience, the major factors for the variance in disputed valuations are different assumptions with respect to the earnings or cash flows adopted and their related growth rates and risk,” Gibson observes. “A properly prepared valuation is one where these assumptions have been formed based on a sound, appropriate analysis of the information that is available. But how much analysis is enough?” asks Gibson.
Gibson bases his article around the APES 225 framework and delves into the definitions of a “calculation engagement” and a “limited scope valuation engagement” to illustrate how facts and circumstances of valuation engagements vary widely.
Gibson sets out three examples where he outlines appropriate inspection, inquiry, computation, and analysis for a full-scale valuation.
Subscribe now to BVA and read Gibson’s article as soon as it releases.
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Australia chapter reports increased growth
ASA’s Australia Chapter has grown about 8% since July 2014. Chapter president David Crick, ASA, attributes the increase to recently implemented membership officers who have helped make inroads to assist candidates transitioning to members, along with active chapter meetings and new IIBV POV courses.
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RICS continues its push into BV credentialing
The Royal Institution of Chartered Surveyors (RICS) has been making a big leap into business valuation certification. Earlier this year, it launched its distance learning format for core BV techniques. Next up is its Certificate in Business Valuation Techniques course, which will begin 15 April. This 300-hour course is an introduction to the BV discipline, and it can be taken over six months.
Help wanted: RICS is looking for an international director for business valuation to develop a strategy to make its BV designation “the most sought after designation in the practice internationally,” according to a job posting on LinkedIn.
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Free webinar introduces new International Valuation Handbook – Guide to Cost of Capital
Don’t miss the free upcoming webinar International Valuation Handbook: The Final Installment of the Duff & Phelps Trilogy (16 January), featuring James Harrington (Duff & Phelps). Get an in-depth look at what's included in the new International Valuation Handbook – Guide to Cost of Capital and how valuers can put it to work. If you cannot make it to the live event, you can request a recording of the webinar by registering here.
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Get financial details of 22,000-plus acquired private companies with Pratt’s Stats
In case you missed this announcement, Pratt’s Stats is a prominent private-company merger and acquisition (M&A) transaction database with complete financial details on 22,000-plus acquired private companies in Australia and several other countries, including the U.S.
With up to 100-plus data points that include six valuation multiples and 13 financial ratios, the database includes detailed data needed to apply the market approach, derive a selling price and benchmark performance, or perform a fairness opinion analysis. View sample reports here.
Pratt’s Stats helps you:
- Defend your value conclusions with evidence from 22,000-plus, 100% sold private-company transactions;
- Bolster your research with the Pratt’s Stat’s Analyser, an Excel-based tool that computes valuable statistics and ratios and applies various regression formulas and valuation multiples to a subject company;
- Perform customised searches by buyer type, business type, and more;
- Get a detailed transaction report with seller details (when available), source data, income data, asset data, transaction data, and more; and
- Receive Pratt’s Stats Private Deal Update, a quarterly publication with analysis of acquisitions by private buyers from the Pratt’s Stats database.
Business Valuation Resources is building the Pratt’s Stats private-deal data for the Australasian market, and we need your assistance to collect additional financial and private-company sale details for Australia and New Zealand.
If you have been involved in business transfers and have the details of those sales, please click here to learn more about submitting deal data and the benefits you will receive from your participation.
Who to contact: If you have any questions about the Pratt’s Stats deal database and how to submit data, please email BVR financial researcher Zac Cartwright at zacc@bvresources.com.
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Coming up in the January Business Valuation Australia
If you haven’t yet subscribed to Business Valuation Australia (BVA), our quarterly journal for Australian and New Zealand business valuation practitioners, you are missing out. With BVA, you will keep up with the latest patterns and trends in business valuation, analysis of new methodologies, and regulatory and standards updates.
In addition to John Gibson’s article, highlights of our upcoming issue include:
- Summary of the key takeaways from the recent Business Valuation and Forensic Accounting Conference;
- “Valuer’s Q&A Corner”: Advice from Bob Morrison, ASA, who taught the International Institute of Business Valuators (IIBV) course in Australia earlier this year;
- Financial distress and valuation impacts—lessons from the REIT sector, by Richard Stewart;
- Pretax versus post-tax discounted cash flows in loss and damages calculations, by John-Henry Eversgerd; and
- Increased demand for SME valuations, by Andy Gilmour.
Learn more and subscribe today.
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