This can be an informal or formal process, depending on the purpose of the valuation.
It might be a valuation of the whole or part of company, business or partnership, or a valuation of individual assets within it.
Informal valuations
This normally involves an estimate of value that could be regarded as reasonably reliable without incurring the full cost of a more formal and precise valuation. This is often useful when a "rough idea" or range of figures is required in anticipation of a negotiation.
An informal valuation normally involves:
- a general discussion with owner managers and professional advisers
- a review of a limited number of documents and records.
Formal valuations
These are required for various purposes, including:
- sale and purchase of a business or part thereof
- share issues or cancellation
- restructuring
- contractual disputes
- dispute among shareholders
- matrimonial dispute
A formal valuation involves a more thorough review of documents and records and more intensive enquiry into the operations of the business. The nature and extent of the work will depend on the unique circumstances of each business.
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