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About Business Valuation
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What is meant by business valuation? Business valuers estimate the value of three things:

  • financial and intangible assets and liabilities such as contracts, brands and intellectual property
  • businesses
    •  
  • securities such as debt, equity, derivatives and hybrid securities.
There are also plant and equipment and property valuers who practice in their specialised asset classes. 
 
In the last three years, Chartered Accountants have seen dramatic changes in accounting rules, taxation regulation and corporate governance practice. Chartered Accountants in both business and practice will be aware of the sweeping effect these changes have had on their traditional roles. However, many may not have noticed some of the new skills that they will need. Business valuation, a skill previously regarded as peripheral to the core skill-set of many Chartered Accountants, is now front and centre. For example: 
 
Tax: many of the aspects of the tax consolidation regime rely on the application of market values to determine taxation outcomes 
 
IFRS: standards around business combinations, intangible assets, employee options and financial instruments highlight the need for much more regular valuations of assets and liabilities 
 
Governance: changes to remuneration governance require a specific linkage between performance measures selected for remuneration plans and the market value of a company. Without an understanding of value, this linkage is impossible. On top of all this, an increased focus on corporate performance requires a rigorous approach to value in a context of corporate transactions. Well-prepared Chartered Accountants will recognise that an increased understanding of valuation is essential in managing all of these new requirements. 
 
In view of the level of education required to adopt business valuation processes and some of the issues that are outstanding in relation to this practice, the Institute of Chartered Accountants has established the Business Valuation Special Interest Group (BVSIG). It has three principal functions:
  • To promote a better understanding of professional valuations within the accounting profession and those groups that rely on the work of valuation experts such as tax advisors, senior management, regulators and other stakeholders; 
  • To assist professional valuers maintain high professional standards, increase awareness of issues impacting their clients and to provide advice and direction in responding to these issues;  
  • To provide technical expertise and formulate policy. 
For more information: 
 
Action Plan 2007/2008 
 
Business Valuation Special Interest Group Brochure 
 
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