Business & Intangible Assets Valuation – GCA Professional Services Group
Business & Intangible Asset Valuation

Measure the value of businesses or intangible assets could be a difficult job, but not for us.

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Our Business and Intangible Asset Division is comprised of a team of highly experienced professionals with backgrounds of investment banking, consulting and account auditing. With over two decades of experience, our team is well equipped to handle all kinds of valuation exercises ranging from valuation of a technology start-up, to valuation of a multi-national conglomerate.

BUSINESS VALUATION

Business valuation is a process of determining the value of a business enterprise or ownership interest therein.

First and foremost, business valuation analysts must identify what it is that we are trying to value, as well as the purpose of the engagement. The premise of the valuation is also very important. If the premise of the valuation was assumed to be liquidation, the impact from liquidation should be considered.

Valuation Scope

Purposes of performing a business valuation are wide-ranging, and they include the following:

  • Mergers and acquisition
  • Financial reporting
  • Goodwill impairment
  • Initial Public Offering (IPO)
  • Pre-IPO advisory
  • Business planning
  • Litigation and ownership disputes
  • Shareholder oppression cases
  • Estate, gift and income tax
  • Marital dissolution
  • Reorganizations or liquidation
  • Stock option plans

INTANGIBLE ASSETS VALUATION

Intangible assets are assets that do not have physical substance but represent some value to the owner. Intangible assets basically can be classified into the following categories:

Trademarks, trade names, service marks, collective marks, certification marks, internet domain names, trade dress and newspaper mastheads

Customer lists, order or production backlog, customer contracts and the related customer relationships which meet contractual criterion, and non-contractual customer relationships which meet the separability criterion

Plays, operas, ballets, books, magazines, newspapers, literary works, video and audio-visual materials, musical works, pictures and photographs and artistic works which meet contractual criterion

Licences, royalties and standstill agreements, advertising, construction, management, service or supply contracts, lease agreements, franchises, operating and broadcasting rights, use rights such as drilling, water, air, mineral and timber-cutting, servicing contracts such as mortgage and employment contracts and non-competition agreements

Patented and non-patented technology, computer software, mask works, databases and trade secrets such as formulas, processes or recipes

VALUATION APPROACHES

In the course of performing a business or intangible asset valuation, there are three valuation approaches available that business valuation analysts must consider. The approach or approaches deemed the most relevant will then be selected for use in the fair value analysis.

Cost approach is a general way of determining a value indication of a business, business ownership interest, or security using one or more methods based on the value of the assets net of liabilities.

In the valuation of a business, cost approach presents the value of all the tangible and intangible assets and liabilities of the company.

Based on the principle of competition, market approach assumes if one thing is similar to another and could be substituted for the other, they would compete with each other, then they must be equal in value. The fair value derived must be based on a sufficient number of comparable companies / market transactions in order to derive a relevant and meaningful comparison.

Under income approach, it is required to forecast the future benefit streams over a reasonably foreseeable short term and an estimate of a long term benefit stream that is stable and sustainable. Using an appropriate discount rate, the future benefit streams (in the form of cash flow) are discounted back to the valuation date as present values and summed up to derive the fair value.

IFRS 3(R) – Business Combinations

IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations

IFRS 9 – Financial Instruments

IFRS 10 – Consolidated Financial Statements

IFRS 13 – Fair Value Measurement

IAS 36 – Impairment of Assets

IAS 38 – Intangible Assets

IVSC – International Valuation Standards

ASC 350 – Intangibles – Goodwill and Other

ASC 360 – Impairment and Disposal of Long-Lived Assets

ASC 805 – Business Combinations

ASC 810 – Consolidation of Variable Interest Entities

ASC 820 – Fair Value Measurement

Professional credential

Our team members are well qualified and hold one or more of the following professional designations:

  • International Certified Valuation Specialist (ICVS)
  • Certified Public Accountant (CPA)
  • Chartered Financial Analyst (CFA)
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