Business valuation

Download our sample engagement letter for a valuation service prepared in terms of APES 225 Valuation Services.

This letter is not authoritative but is a guide, bearing in mind considerations outlined in this standard. You will need to vary it according to individual requirements and circumstances of each engagement.

Disclaimer: Chartered Accountants Australia and New Zealand disclaims any liability arising to any person as a consequence of the reliance on the contents of this example letter by any person.

Members can access a Proforma Report - Valuation Report Structure and Content prepared in terms of APES 225 Valuation Services and supplementary Guidance Note GN 20.

This template, which incorporates cross references to APES 225 and GN 20, is not authoritative but can be referred to as a guide, bearing in mind considerations outlined in the standard and guidance note.

You will need to vary it according to individual requirements and circumstances of each engagement.

We also encourage you to seek independent advice from a qualified person before using and relying on this sample report template.

Chartered Accountants Australia and New Zealand disclaims any liability arising to any person as a consequence of the reliance on the contents of this report template by any person.

Our Concise guide to managing business valuation risk provides information for directors to assess their exposure to valuation risk, evaluate the board’s level of expertise to deal with valuation issues, and exercise appropriate due diligence when addressing questions around valuation risk.

Three areas in which directors’ exposure to valuation risk have arisen are:

1. Evolving accounting and tax regulation
2. Changing balance sheets
3. Increased market volatility

Directors have an important role to question risk management processes, and ensure adaptability to the board's corporate strategy.

There is an elaborate and interrelated set of financial skills and business acumen involved in business valuation, including financial forecasting, benchmarking and industry analysis and capital markets understanding.

The guide provides a list of questions to assist directors to evaluate the level of expertise within an organisation.

The appraisal foundation

• Uniform Standards of Professional Appraisal Practice
• International Appraisal Standards
• USA valuation sources
• Value management

Valuation Standards around the World

• International Business Valuations Council
• The Canadian Institute of Chartered Business Valuators
• The American Society of Appraisers
• Uniform Standards of Professional Appraisal Practice
• International Appraisal Standards

Australian Securities Investments Commission guidance relevant to business valuation practitioners.

• ASIC regulatory guides 111 and 112 have replaced PN42, 43 and PS75

Australian Taxation Office guidance relevant to business valuation practitioners

• Consolidation and market valuation summary

The latest edition of the International Valuation Standards (IVS) has been published, updating IVS 2017. It includes a new chapter, 'IVS 220 Non-Financial Liabilities' as part of the intangible asset standards and technical revisions consulted on in 2018-19.

Read the new standard

Stephen is a Partner of Deloitte’s mergers and acquisitions business, specialising in providing clients with valuation advice for mergers and acquisitions or other commercial purposes. 

During his 30+ year career with Deloitte Stephen has provided clients with corporate finance advice, pre-acquisition due diligence reviews, valuations, structuring advice and feasibility studies in respect of companies operating across a broad range of industries throughout Asia.  

Stephen is an Adjunct Fellow of Macquarie University and teaches the Applied Business Valuation and Advanced Valuation for Corporate Finance in the university’s Masters of Applied Finance. He is also a CA Business Valuation Specialist and a member of the ICAANZ Business Valuation Specialisation Committee.

Fiona is a partner in PPB Advisory's Valuation team. She has over 20 years' experience in corporate finance having worked in senior roles at Deloitte and EY, before joining PPB Advisory in 2014.

Fiona started her career in audit, working in Australia, Europe and South Africa and now specialises in providing business valuations.

Fiona has advised on acquisitions, divestments, valuations and financial due diligence assignments for numerous clients across a broad range industries. Regarding valuations, Fiona specialises in preparing independent expert's reports and tax and accounting compliance valuations as well as valuations of infrastructure assets.

Fiona also prepares valuations of equity, executive options, businesses, brands and other intellectual property, utilising various methodologies and for different purposes (accounting, corporate tax, stamp duty, capital gains tax, transfer pricing and other regulatory requirements).

Hugh is Business Unit Head for Forensic Accounting Services at Nexia Edwards Marshall in Adelaide.

Hugh specialises in Forensic accounting and litigation support services, covering the spectrum of business valuation services including matrimonial property matters, particularly, professional service enterprises and minority interests.

Taking a holistic approach to business advisory, Manda works with her clients to assess their business with a big picture philosophy to successfully help them implement the work required.

Manda enjoys working with clients who have strong growth aspirations. Apart from day-to-day assistance with tax and accounting compliance obligations, she also enjoys being a sounding board to her clients on strategic business planning. Drawing on her extensive experience in business valuations, mergers and acquisitions and ASX listings, her practical approach is focused on maximising business outcomes and supporting her clients to achieve their commercial goals.

Manda is a member of the Chair of the Chartered Accountants ANZ Business Valuation Committee and an Honorary Fellow of Macquarie University, where she lectures in Applied Business Valuations to postgraduate students.

Richard is a PWC Partner with experience in company and business valuations, corporate finance and mergers and acquisitions.

His experience has involved valuations of companies and businesses for the purposes of acquisitions, divestments and mergers including independent expert's reports on takeovers and proposals requiring shareholder approval.

Richard is a past chair of the NSW Regional Council of CAANZ and past Chair of the Business Valuation Special Interest Group (BVSIG) of that Organisation.

Richard is an Adjunct Professor at the Business School of the University of Technology, Sydney.

Steve became a partner with HLB Mann Judd in 2009 and is an industry respected auditor and advisory partner specialising in funds management, manufacturing, transport & logistics enterprises, construction and corporate transaction advice. When asked about the challenges about valuing businesses in many different structures, Steve noted that the commercial and analytical skills gained through auditing help him in good stead.

Personal philosophy: “I work to get results for my clients. I take great pleasure in seeing their growth and knowing I have contributed.”

My motivation/focus: Enjoying my newer focus on the corporate advisory environment in valuing equity in businesses arriving at ‘fair-value opinions’ whilst being involved in broader transaction advice. In summary: the excitement of seeing the Australian business landscape evolve.

Peter Haley has over 30 years of accounting and business analysis experience.  Since joining Vincents in 2001 Peter has specialised in forensic accounting and litigation support, with a particular focus in the areas of family, commercial and estate litigation. Prior to this, he worked for 15 years in a variety of accounting firms where he practiced in all areas of accounting, business and taxation planning, performance of due diligence assignments, audit and financial planning.

Peter’s central focus is the examination and valuation of both simple and complex businesses and structures.  Peter has prepared and submitted forensic accounting reports as expert evidence and appeared to give evidence in the Queensland Civil and Administrative Tribunal, Magistrates Court of Queensland, District Court of Queensland, Supreme Court of Queensland, Supreme Court of New South Wales, Supreme Court of the Australian Capital Territory, Federal Circuit Court of Australia, Family Court of Australia, Federal Circuit Court of Australia, National Court of Justice, Papua New Guinea and High Court of New Zealand.

Peter is a regular presenter and has delivered many seminars and workshops over his career including Vincents Specialist Training, Queensland Law Society, College of Law (Sydney) and ACT Law Society.

Nadine is a Partner in RSM Australia’s Corporate Finance division.  She has been undertaking valuations in Australia for almost 15 years, having moved from the UK where she worked in both Audit and Restructuring roles.

Nadine leads the valuation and litigation support services team in Perth, which has a particular focus on relationship, property and shareholder disputes.  She has valued companies and businesses in a wide range of industries and for other purposes such as acquisitions, divestments, independent expert reports and taxation.

Simon specialises in valuing private businesses and quantifying damages.  

Simon is an Accredited Business Valuer and an Accredited Forensic Accountant with Chartered Accountants Australia and New Zealand (CA ANZ).  

He chairs the CA ANZ Business Valuations group for Queensland and is a CA ANZ Business Valuation Committee member.    

Simon’s qualifications include the New York Stern University Advanced Valuations program, Graduate Diploma in Applied Finance, and the Certified Fraud Examiner qualification.    

Prior to founding Lotus Amity, he was a Forensic Accounting and Corporate Finance partner with BDO Australia and led their national forensic practice. He has worked on many cases in a wide range of industries, including assisting in multi-billion-dollar litigation in relation to the Bernie Madoff’s $65bn Ponzi scheme.  

Simon has assisted in many legal matters, including breach of contract, shareholder and transaction disputes and matrimonial matters. Forensic services provided include economic damage calculations, business valuations and interpretation of financial information. He has acted as an expert witness, as a shadow expert and assisted in mediations.