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Valuation – definition and relevance
Valuation is the process of determining the current worth or value of a business or asset or an enterprise. It is the process of ascertaining the present value of an asset or a company.
Business valuation techniques are used to determine the fair value of a business for a variety of reasons, including fixing sale value, establishing ownership share of partner/s, determining purchase consideration, tax liability; investment analysis, business analysis, and merger and acquisition transactions and even in litigation matters.
Valuation is carried out on tangible assets – stock, shares, fixed assets and intangible assets – example: patents, trademark and goodwill. Valuation is also done on liabilities.
In finance, there are many techniques used to determine value of an asset or business.
As valuation requires judgment and assumptions, it is imperative to have proper disclosure of assumptions, key information and limitations in arriving at the value for better appreciation by users of valuation reports.
Valuation requires adequate understanding of various valuation methods available, knowledge to use appropriate method to value an asset and liability or business, deep knowledge in accounting practices keeping in mind that all valuation models and methods have limitations with respect to degree of complexity, relevance of observations, mathematical form.
Valuation is carried out on tangible assets – stock, shares, fixed assets and intangible assets – example: patents, trademark and goodwill. Valuation is also done on liabilities.
In finance, there are many techniques used to determine value of an asset or business.
As valuation requires judgment and assumptions, it is imperative to have proper disclosure of assumptions, key information and limitations in arriving at the value for better appreciation by users of valuation reports.Valuation requires adequate understanding of various valuation methods available, knowledge to use appropriate method to value an asset and liability or business, deep knowledge in accounting practices keeping in mind that all valuation models and methods have limitations with respect to degree of complexity, relevance of observations, mathematical form.
Role of VXJC
Our specialized professionals having versatile knowledge in accounting and on a range of valuation techniques and adequate experience in selecting and applying suitable valuation methods to appropriate cases provide the clients the confidence to take right decisions on shell-out, inviting investors, business acquisition, merger, making new investment, and purchase of rights, shares, bond or assets tangible or intangible in part or otherwise.
VXJC’s valuation reports with full disclosure of vital information, limitations, methods used, assumptions taken, places the client a better informed and can put high reliance to take a holistic view of the situation.