Business valuation, business interests, intangible assets, ownership rights, damage calculation
Our firm is frequently instructed to perform valuation of businesses, business interests and other ownership rights, intangible assets, damages and indemnities. A successful valuation engagement depends from a clear understanding of its terms (“scope of work”) as agreed by the client and by the valuer. An important element of scope of work is the identification of the “basis of value” that is appropriate for the intended purpose of the valuation as well as for the nature and the extent of the valuer’s work.
Bases of value describe the fundamental premises on which the reported values will be based. It is critical that the basis (or bases) of value be appropriate to the terms and purpose of the valuation assignment, as a basis of value may influence or dictate a valuer’s selection of methods, inputs and assumptions, and the ultimate opinion of value. While there are many different bases of value used in valuations, most have certain common elements: an assumed transaction, an assumed date of the transaction and the assumed parties to the transaction. IVSC’s International Valuation Standards define the bases of value that are used more frequently by valuation experts worldwide:
In addition to the above listed IVS-defined international bases of value, sometimes other may apply, depending from local jurisdiction or in connection with specific assignment purposes. To mention a few of them we have become familiar through our work: