Notional valuations are often required to value an asset or business interest to support or assist in the negotiation of a matter between non arm’s length parties. Examples include transactions between shareholders or related parties, transactions for taxation and corporate reorganization, to support transfer pricing and for matrimonial purposes.
Fair value for financial reporting purposes. Notional valuations are often required to establish the value of intangible assets, such as brand names, trademarks, and customer or supplier contracts. The valuation of the individual assets is needed in order to allocate the purchase price on a business acquisition and required for financial disclosure purposes. Valuations are also needed to assess the fair value of business segments for purposes of goodwill impairment testing, also required for financial reporting purposes.
Corporate finance and transaction-based activities. Assignments often include valuation of the business or asset, due diligence and transaction support in respect of financings, mergers and acquisitions, leveraged buy-outs, management buy-outs, buy/sell agreements, initial public offerings and the preparation of analyst reports and studies.
Regulatory areas where independent valuation conclusions are required by securities commissions and other regulatory bodies. Assignments include formal valuations for going private transactions and non-arms length dealings, fairness opinions required by Independent Committees of the Boards of public companies and financial assessments for Regulatory matters.
Strategic planning. Assessing the value of a business or asset may be an important first step in corporate, strategic and succession planning. This may include.preparing a business for sale including the identification of value drivers to potentially enhance the value of the business.