Why do you need a Hornbeam Valuation? All valuations are a mixture of mathematics and opinion. With a Hornbeam Valuation Report you will get an explanation of how and why we have chosen the most appropriate method. We will then work through the calculation to arrive at the valuation. All stages of the methodology are set out clearly. Our valuations are a combination of rigorous application of valuation theory and commercial experience. Wherever appropriate we will refer to valuation case law and the recent experience of our panel of sales agents. We will offer you the chance to comment on the draft before we issue our final report. Hornbeam’s valuers are qualified chartered accountants with an average of 20 years of experience advising a range of businesses.
We are not sales agents, we will give you a truly independent valuation.
We can provide expert witness support to our valuations if required.
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More on Valuations
Independent Valuations and FRS102 We Accountants will have been trained to believe that balance sheet assets are included at the lower of cost and net realisable value. So usually in practice at cost. This “prudent” method of valuation worked well for most companies, especially trading companies, but it never worked well for investment companies, whether that investment was property or shares. Investments in new kinds of assets, broadly known as IP or intellectual property have become very important in the advanced economies but hardly register under traditional accounting systems.
Something had to change, and the change has begun under FRS102. – Whilst the author(s) of section 18 have a rather peculiar view of what constitutes intangible assets (capitalisation of internally generated brands, logos, publishing titles, and goodwill and much else is specifically prohibited by 18.8C, prototypes, models, tools, jigs, moulds and pilot plants are given as examples of intangible assets that might be capitalised at 18.8J) the principle of capitalisation at cost, amortization and impairment review is accepted at 18.18A and of carrying at fair value at 18.18B. But fair value must be determined by reference to an active market which is pretty much impossible for the types of assets included. Non-the-less purchased IP may well be covered by section 18.
At 19.22 to 19.23 The Standard sets out the accounting method for goodwill again at capitalisation at cost, amortization and impairment review.
So the accounting principle of carrying an asset at its fair value, which is accepted for property assets is not yet extended to intangible assets, but the principle of annual impairment reviews for intangible assets is established in FRS 102 – and Hornbeam can provide that “independent valuation” of those intangible assets.
I would also note that the auditor’s ethical guidance, contains an absolute prohibition, on the auditor providing assistance to an audit client on judgement and valuation issues. Auditors are not allowed to prepare the cash flows or valuations which underpin their client’s views on going concern or impairment of asset values. In some cases they may not want to. Again Hornbeam can provide companies with an independent view of asset values and going concern.