Business Valuations

Business Valuation

Producing Business valuations is the procedure of utilising the valuer’s knowledge and experience to arrive at the best method  to determine  the value of an owner's interest in their business.

For over 30 years have been producing business valuations for a diverse number of reasons including, family law cases, professional practice valuations and for use to resolve disputes. These disputes can be related to estate and gift taxation, divorce litigation, or allocate business purchase price among business assets. They can also establish a formula for estimating the value of partners' ownership interest for buy-sell agreements, and many other business and legal purposes.

Changes in the global economic environment have influenced the development of business models where IP is a central element establishing value and potential growth. In addition to these systemic changes, international accounting practices place pressure on firms to recognize and value all identifiable intangible assets of a firm as part of a transaction (in a merger or acquisition, for example). As a result of these trends, a proper and correct business valuation of intellectual property, followed by measures to protect that value, have become a key element of the success and viability of a modern firm.

Business Reports & Values are recognised as business valuation specialists and expert business Valuers by courts, government departments, and the Legal profession. A high percentage of our valuation reports are for Court purposes

As business valuation specialists we quickly gather an in-depth understanding of the market, and the asset or liability being valued. We have a great understanding of the financial and non-financial information, as well as factors such as legal or regulatory environment.

There are three primary approaches used for business valuation. These approaches are the:

  • Income Approach – This is an approach based on the normalized earnings of the business, with all discretionary, non-operating, and non-recurring expenses (or extraordinary revenues) removed. A normalised level of earnings is developed as well as an appropriate capitalisation rate which is a rate of return anticipated by an investor based on the risk of the business.  A value is determined by dividing the normalised after- tax earnings by the capitalization rate. (This is a one-year model; there is also a multi-year model called discounted cash flow analysis).
  • Market Approach – The valuer will look to find similar type businesses, in the same industry, which have sold recently or in the past few years.  The valuer uses pertinent criteria to find comparable transactions. There are various databases that a valuer can use to find comparable transactions. Typically, market multiples from the transactions are developed and then applied to the subject business being valued.
  • Asset Approach - The valuer will review the tangible assets and any liabilities of the business and adjust to reflect the fair market values of the net tangible assets.  The valuer will also consider the intangible assets of the business.  These intangible assets are included in the valuation, and often categorised as goodwill.  The value of goodwill is added to the net tangible assets to develop a value conclusion for the business.

The principle of brv Lee Goldstein has been involved in Business Valuations and sale of Businesses since 1985. He holds a double major degree in Accounting and Finance, a Diploma in Forensic Accounting, a Graduate Diploma in Valuation (property), an Advanced Certificate of Business and an Advanced International Certificate in Intellectual Property. Lee has conducted numerous intellectual property valuations covering a diverse range of industries and  is often called upon to provide expert testimony in judicial matters. He  has valued businesses and intellectual property worth over $3.2 billion.