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

Alan is a Partner at Pitcher Partners in Sydney. He has over 20 years' experience as a Chartered Accountant specialising in business valuation, intangible assets, options and other financial instruments for the purposes of mergers and acquisitions, taxation and financial reporting.

Alan is a member of the Accounting Professional & Ethical Standards Board's Taskforce established to revise the professional standard and guidance notes for valuation practitioners.

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 Managing Partner and Business Unit Head for Forensic Accounting Services at Edwards Marshall in Adelaide. He is a Registered Company Auditor and Registered Liquidator with over 35 years' experience in the accounting industry in Australia and the UK.

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.

Paul is the principal of Moriarty Associates Limited, a New Zealand based firm providing business valuation and forensic accounting services. He has over 20 years' experience working in 'Big 4' professional firms (KPMG and EY) and senior corporate roles in the United Kingdom, Australia and most recently, New Zealand. 

Paul specialises in the provision of expert reports in a wide variety of investigative and valuation matters with a focus on relationship property and shareholder disputes. He has valued companies and businesses across a wide range of industries, and has given expert evidence in mediations, arbitrations and court proceedings in New Zealand. Paul is a member of Chartered Accountants Australia and New Zealand, a Fellow of the Institute of Chartered Accountants in England and Wales, and a member of the New Zealand Institute of Directors. 

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.