VALUATION OF COMPANIES AND ENTERPRISES
Determination of value is intended to support the entrepreneur or executive board in effective management of the company and making sound investment decisions. Implementation of this process requires – among others – relevant experience, knowledge of best practices and applicable legal regulations.
That's why often an external consultant with the necessary experience and reputation is appointed.
We perform valuations for the following needs:
- transformation and change of legal form;
- determining the parity of the exchange of shares in a merger or split of enterprises;
- contribution in kind;
- transactional needs, i.e. sale, purchase of shares;
- new issuance of shares;
- accounting requirements (including purchase price allocation and impairment tests);
- succession and inheritance proceedings;
- establishing a collateral;
- internal needs of the owner.
Depending on the needs of the client, we are able to estimate the value under specific:
- standards (including fair value, recoverable value, investment value), and
- reporting standards (including Polish Accounting Standards and the Accounting Act - PAS, IAS, IFRS, US GAAP).
Each entity is unique, which calls for individual approach, taking into account the purpose of valuation, industry, stage of development of the entity, its size or profitability.
Therefore, during the first contact with the client, we place great emphasis on establishing the purpose of the valuation and thorough understanding of its subject.
We deliver several types of valuations:
- Company valuation;
- Valuation of an enterprise;
- Valuation of an organized part of an enterprise;
- Valuation of collaterals;
- Valuation of real estate;
- Valuation of intangible assets (including brands, know-how and technology);
- Valuation of economic damage;
- Purchase price allocation (PPA);
- Impairment test;
- Private investor test (TPI);
- Fairness opinion.
The valuation process begins with appropriate selection of the valuation method. For each case we select methods appropriate to the purpose and specifics of the subject of the valuation.
Valuation methods used:
- The income approach (DCF), in which the value of the object of valuation is determined on the basis of expected future economic benefits associated with the subject of valuation. These benefits are expressed as cash flows.
- The asset approach, where the value of equity is determined as the total value of the entity’s assets and liabilities, with adjustments made in areas where significant differences exist between book value and economic value.
- The market approach, in which valuations are based on multiples of comparable listed companies or M&A transactions of companies similar to the subject of the valuation.