Business valuations / profitability reports

peaman

I have a client that keeps wanting to refer work to me which is either preparing the valuation for a client that wants to sell their business, or a report on a company that one of their client's is thinking of buying. I have done a couple of these already and the client (and their clients) was very happy with my work. The problem is, I worked in practice for 19yrs before working for myself and I have never had to prepare valuations/reports like this in the time I was in practice. As I have not had to prepare reports like these before I have nothing to compare my work to and it does give me a slightly uneasy feeling that I could be doing them better. Does anyone have experience of preparing business valuations/reports on businesses profitability that may be able to give me some advice?

stevo5678

I think it is a real grey area anyway and most accountants are not that experienced in this area. There is some good guidance I found from the ACCA just google ACCA business valuations and you should find it. In a nutshell different business sectors have different valuation methods, some on T/O for EG and some on profit plus various other methods A tax expert who I share a building with said it's really easy really, it's worth what you can sell it for !! I look at business for sale websites to form part of the overall picture as you normally get a trend

peaman

Thanks Stevo. I have found a couple of sample valuations prepared by professional valuers, they seem similar to what I have prepared previously but they are just padded out with more waffle. I will check out the ACCA and business for sales websites! Thanks.