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A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Fair value, impairment and purchase price allocation work prepared the way auditors test it, for Sydney companies, funds and boards that report under Australian Accounting Standards.
Indicative valuations from A$799. Certified Summary and Detailed reports from seven business days.
A financial reporting valuation in Sydney supports a figure in the accounts that an auditor will test under ASA 540: the fair value of an unlisted investment under AASB 13, the recoverable amount of a cash-generating unit under AASB 136, the allocation of a purchase price under AASB 3, or the grant-date fair value of an employee award under AASB 2.
Several figures in a set of financial statements are opinions rather than records. The carrying value of an unlisted investment, the goodwill that survived this year's impairment test, the intangible assets recognised after an acquisition and the expense booked for share-based payments all rest on a valuation judgement. Auditors test those judgements under ASA 540, the auditing standard on accounting estimates, and they test them harder every year.
The consequences of a weak estimate are not confined to the audit file. An overstated investment inflates a fund's reported returns and the fees calculated on them. A goodwill write-down that arrives late overstates profit and can breach a lending covenant when it finally lands. An acquisition booked with all of its premium left in goodwill, rather than allocated to customer relationships, brands or technology, produces the wrong amortisation charge and the wrong impairment base for years afterwards.
ASIC's financial reporting surveillance has repeatedly named impairment of non-financial assets and the valuation of unlisted assets as focus areas, and the same questions reach private companies through their auditors and their lenders. For listed groups headquartered in Sydney, for mid-market companies reporting to their banks, and for the private equity and venture funds based in the city, the standard expected of a Level 3 estimate is the same.
We prepare these valuations for CFOs, audit committees, fund managers and their auditors. The work is built around the questions the auditor will ask, because a valuation that cannot survive that conversation has not done its job.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Four standards generate most financial reporting valuation work. Each asks a different question, uses a different measurement basis, and is tested by the auditor in a different way.
Fair value is an exit price: what a market participant would pay for the asset, or accept to take over the liability, in an orderly transaction on the measurement date. Inputs are ranked in three levels, and almost every private company investment sits at Level 3, where the entity's own assumptions drive the answer and the disclosure requirements are heaviest. A recent arm's length round anchors the valuation, but it is calibrated and rolled forward, not copied across.
Goodwill and indefinite-life intangibles are tested every year; other assets are tested when an indicator appears, including a market capitalisation that has fallen below net assets. The test compares the carrying amount of a cash-generating unit with its recoverable amount, meaning whichever is higher of the unit's value in use and its fair value less costs of disposal. The value in use figure is built from board-approved forecasts, normally capped at five years, on the assets in their current condition, discounted at a pre-tax rate.
After an acquisition the price paid is allocated to the identifiable assets and liabilities at fair value, including intangibles that never appeared in the target's own accounts: customer relationships, brands, technology, order backlog, restraint agreements. What remains is goodwill. Contingent consideration such as an earn-out is recognised at fair value on the acquisition date and, where it is a liability, remeasured through profit or loss until it is settled.
Awards to employees are measured at fair value on the grant date and expensed over the vesting period, using an option pricing model for options and performance rights. The detail, including how the accounting value differs from the employee's tax value under Division 83A, is on our employee share scheme page.
Two AASB 9 questions arrive at businesses that never think of themselves as holders of financial instruments. A convertible note the company has issued may need to be split between a debt component and an equity or derivative component, with any derivative remeasured at each reporting date. Trade receivables must carry an expected credit loss allowance under the simplified approach, which calls for a provision matrix built from the company's own loss history and adjusted for current conditions, rather than a flat percentage applied to the ledger.
Fair value work under AASB 13 starts from enterprise value, using the market approach with multiples from listed peers and comparable transactions, and the income approach with a discounted cash flow, as the stage of the company and the available data allow. That value is then allocated across the capital structure with a waterfall, an option pricing method or a backsolve to the latest round. Where the fund transacted recently, the model is calibrated so that it reproduces that price on that date, and the inputs are then moved for what has changed since: trading performance, market multiples, the company's own milestones. Debt and credit positions are valued on a yield basis against current market rates for comparable risk, with enterprise value coverage as the cross-check.
Impairment work under AASB 136 starts before any spreadsheet, with the cash-generating unit structure and the allocation of goodwill, because a unit drawn too widely lets a strong business hide a weak one and auditors know it. Value in use is then built on the discipline the standard demands: current-condition cash flows with expansion capital and uncommitted restructuring stripped out, a terminal growth rate that can be justified against long-run evidence, and a pre-tax discount rate derived iteratively from a market-based post-tax weighted average cost of capital rather than by a simple gross-up. Where value in use is marginal we also prepare fair value less costs of disposal on market participant assumptions, since the recoverable amount is the higher of the two, and an entity that tests only one measure can end up impairing an asset that was not impaired.
Purchase price allocation under AASB 3 identifies each intangible and values it with the method that fits: multi-period excess earnings for customer relationships, relief from royalty for brands and technology, a with-and-without analysis for restraints, replacement cost for the assembled workforce as a contributory asset. The results are reconciled so that the implied return on each asset is consistent with the return on the deal as a whole, which is the test an auditor applies to the allocation. The same analysis then feeds the first impairment test and the tax cost setting work. Sensitivity and headroom analysis is prepared in the form the disclosures require, so that it drops into the notes rather than being reverse-engineered at year end.
These are the findings that most often turn a clean audit into a qualified opinion, a restatement or a letter from the regulator.
Financial reporting valuations are prepared to be read by an auditor, and often by a regulator, so the depth is almost always at the certified end. The exception is the planning stage, where a board wants to know whether an impairment is coming or what a proposed acquisition would do to the balance sheet before it commits.
The report follows the order in which the auditor works: the accounting question being answered, the unit of account, the measurement date, the information relied on, the method and why it was chosen, every input with its source and date, the calculation, the sensitivity analysis and the disclosure schedule. Judgements are explained in words at the point they are made, so that a reviewer does not have to reconstruct them from a model.
Every report is signed by a certified valuer who will take the auditor's questions directly, walk the audit committee through the sensitivities, and defend the conclusion if it is challenged. We fit the work into your close timetable and coordinate with your finance team and your auditor from the start, because a valuation that arrives after the numbers are signed off is an argument rather than evidence.
If the auditor rejects one assumption in this valuation, does the conclusion change, and do we know by how much? A report that cannot answer that has not been sensitised properly.
Talk your situation through with a certified valuer before you commit to anything, at no cost.