GOING BEYOND THE NUMBERS OF A BUSINESS VALUATION REPORT

A business valuer is a trusted expert called upon during many commercial and court proceedings. In fact, with more companies closing down because of COVID-19, they may be increasingly relied on to provide their expertise as companies liquidate and distribute their various assets.

Over the last decade, there have been many instances where issues related to the submitted valuation report, process, definitions, approaches, methodologies, parameters and assumptions have been legally challenged. Mr Eric Teo, the Founding Chairman of the Institute of Valuers and Appraisers of Singapore (IVAS), puts this down to the legal profession accepting or taking valuation reports at face value. “There’s a sense that this report full of numbers is not really a lawyer’s expertise, so they just accept it,” explains Mr Teo.

But such assumptions don’t really cut it anymore, since members of the Bench have increasingly sought to understand new standards in valuation being called for by bodies like IVAS. “So they will naturally start to expect quality content in those reports; for litigators submitting these reports, this means doing their homework and checking that the valuer’s work makes sense. Being familiar with the report and its definitions means that litigators can also call out inaccuracies or misrepresentations in the opposing counsel’s valuation reports.”

These reports have changed dramatically in the past five years as Singapore keeps up with trends in international valuation standards. But Mr Teo warns that not all valuers have kept up with these changes, making it critical that litigators understand what today’s valuation standards entail.

A one-day workshop on 9 September will allow litigators to understand the practical aspects of business valuation. It will cover the valuation standards adopted internationally, valuation context, areas pertaining to the fundamental concepts and principles of valuation as well as the valuation premise and definitions of values used commonly in the financial and corporate world. Participants will receive 5 CPD points for attending the workshop; registration is now open.