Valuations - Tax Disputes

Corporate Valuations

‘The Value of any asset is ultimately determined through a negotiation process between a willing and knowledgeable buyer and seller. An understanding of the intrinsic value of the business is thus essential for the buyer or seller as it enables them to negotiate with the necessary knowledge in order to make an informed decision. This should also form the basis of any value determined for tax purposes.

 We have been doing business valuations since 1998 and now use all the valuation models and reports compiled over the years to standardise offerings that are more in line with the requirements of small- and medium sized businesses. The different options are as follows:

         Basic                       Detailed2                       Comprehensive3                  
Executive summary 4   ✓
Value calculated 5   ✓
1 hour meeting to explain 6    ✓
Detailed calculations made available 7      ✓
Valuation report 8        ✓


  1. Basic

The basic report is ideal for smaller business owners with a basic need to understand the value of his/her business, in order to decide on whether to pursue a particular course of action. There is not a particular need to understand the underlying calculations of the valuation.

  1. Detailed

Detailed calculations are supplied in a working paper format, in addition to the executive summary. This will be necessary where the client wants a detailed understanding of how the value was calculated. The client will normally be financial skilled and have a hands-on approach in the negotiation of the transaction price. The calculations will assist him/her in these negotiations.

  1. Comprehensive

A detailed valuation report is drafted. This report explains the calculations and valuation in detail. The construction of the value is explained step by step so that it is easy to follow for any person. All arguments, assumptions and calculations are included in the report. This option is normally applicable where there is a need to understand the detail of how the value calculated, by the seller or the buyer. These reports are often used in disputes (such as court cases, settlements, sales triggered by contractual obligations) and where the buyer or seller relies mainly on an expert to determine the value. This option is also necessary for corporate buyers or sellers where a report will document the reasoning behind the transaction price and as such provide comprehensive information to the Board of Directors.

  1. Executive summary

Our executive summary will communicate the value calculated, key assumptions and the valuation method. It is a two page document signed off by us.

  1. Value calculated

We apply our detailed valuation models to calculate the value, regardless of whether the Basic, Detailed or Comprehensive options are selected. The value is calculated in the same constructed manner based on the underlying assumptions and appropriate valuation method.

  1. 1 hour meeting to explain

We will meet for an hour to explain how we calculated the value and make possible adjustments based on feedback in the meeting. This meeting will be either at our office or via Skype videoconference and screen share. We can meet at the client’s office, but this will increase the fee. The client will also need to have presentation facilities available at their premises.

  1. Detailed calculations made available

We will make our detailed calculations available in a working paper format. This will assist the client in understanding how the value is constructed and using this knowledge when negotiating the transaction value.

  1. Valuation report

Our valuation report supports all our calculations and the assumptions used with detailed arguments and reasons. We also do reasonableness checks by comparing different valuation multiples (e.g. P/E multiple, EBIT multiple, Investment recovery period, etc.) with other comparable listed entities.

Please feel free to get in touch with us to enquire about our prices for the above valuation options.