Date posted: 01/03/2022 3 min read

What’s new in Business Valuation: Update from Stephen Reid FCA

Business Valuation Committee Chair Stephen Reid FCA looks at what’s ahead for Business Valuation in 2022 as the global economy continues to provide challenges for valuers.

In brief

  • COVID-19 continues to provide plenty of challenges for valuers
  • Governments will need to tackle growing inflationary pressures in 2022
  • CA ANZ will hold a Business Valuation Conference later this year

Welcome to the first newsletter of the year – we are looking forward to what 2022 brings.

With the Omicron variant outbreak wreaking havoc, it remains a challenging time for the valuation community as COVID-19 continues to disrupt the global economy after two years of the pandemic.

Here are a few things that intrigue me:

  • Surprisingly, global demand for goods hit an all-time high of US$5.6 trillion in Q3 2021. This is a result of easing pandemic restrictions, economic stimulus and increased commodity prices. Will this trend be sustainable in the long run?
  • Inflationary pressures will likely be something governments all over the world will need to tackle in 2022. Inflation in the US was at 7% in the last month of 2021, while in Australia inflation was 3.5% in the last quarter. A major contributing factor is record global demand, however emerging pressure on wages is also having an impact.
  • Another factor that can’t be ignored is China. With growth below expectations in the second half of 2021, the world will closely watch China’s economic performance as a key indicator of how the global economy might recover this year. 

All these global trends make 2022 an interesting year for the valuation community. The IVSC recently put out its second perspectives paper on market value, exploring topics including price versus value, the availability of market information in a pandemic world and value in volatile listed markets. Find out more about what the IVSC had to say here.

Finally, we are planning for the Business Valuation Conference to be held in late 2022. Stay tuned for more details.

As always, we welcome your feedback. Content suggestions for future newsletters are always appreciated. Please email your suggestions to [email protected]

“With the Omicron variant outbreak wreaking havoc, it remains a challenging time for the valuation community as COVID-19 continues to disrupt the global economy.”

Business Valuation and Forensic Accounting Conference 2022

CA ANZ’s biennial Business Valuation and Forensic Accounting Conference will take place in spring 2022. Designed in collaboration with CA ANZ’s Business Valuation and Forensic Accounting committees, this online event is dedicated to building the technical knowledge and critical thinking skills essential for accounting professionals working in these sectors.

Register now AURegister now NZ

Market value: widely used and widely misunderstood

In their second deep dive into market value, the IVSC reveals that it’s a concept often misunderstood by clients and valuation users, causing potential problems for unwary valuers. The latest perspectives paper explores key issues including price versus value, availability of market information in a pandemic world, and assessing value in volatile listed markets.

Read more

Latest International Valuations Standards now effective

The latest version of the International Valuations Standards (IVS) became effective from 31 January 2022. This version of the standards brings greater depth and clarity to the IVS. CA ANZ members can access these standards through the CA ANZ website. A ‘red-line’ version of the updated IVS is also available on the CA ANZ website.

Find out more

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