Date posted: 1/03/2019 3 min read

View from the Chair

Update from Chartered Accountants ANZ Business Valuation Committee Chair, Manda Trautwein CA

In Brief

  • Post-Royal Commission, it’s more important than ever to stay abreast of changes in our profession.
  • With prices high for business with good prospects – what’s the impact on premiums and discounts?

As we settle into the new year, I would like to wish everyone a successful and prosperous 2019!

The year looks set to bring about more changes and technical developments affecting how accountants conduct our day-to-day work. As we are now in a post-Royal Commission environment, financial services professionals are under greater scrutiny than ever before. As such, it’s imperative we continue to strive to stay ahead of the changes impacting our profession.

“It’s imperative we continue to strive to stay ahead of the changes impacting our profession.” 
Manda Trautwein CA Chair, CA ANZ Business Valuation Committee

Warren Buffett, chairman and CEO of Berkshire Hathaway, released his annual shareholder letter a couple of days ago.  I always enjoy reading his letter and love the valuation nuggets that it contains.  In this year’s letter Buffett states that “prices are sky-high for businesses possessing decent long-term prospects”. He also makes this interesting observation:

In recent years, the sensible course for us to follow has been clear: Many stocks have offered far more for our money than we could obtain by purchasing businesses in their entirety.  That disparity led us to buy about $43 billion of marketable equities last year, while selling only $19 billion.  Charlie and I believe the companies in which we invested offered excellent value, far exceeding that available in takeover transactions.

What does that mean for premiums and discounts? Is Buffett suggesting that control premiums are too high in the current market? Happy to hear your thoughts!

Also, if you have any feedback or suggestions for the CA ANZ Business Valuation Committee, please feel free to reach out to your local Committee Member or email CA ANZ to reach them. We look forward to hearing from you.

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If you have any feedback or suggestions for the CA ANZ Business Valuation Committee, please feel free to reach out to your local Committee Member or email CA ANZ to reach them

Email CA ANZ

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