In addition to this and in terms of accounting requirements, IAS 36: Impairment of Assets requires that there is impairment testing on goodwill on an annual basis. Furthermore, it involves a rigorous understanding of the operational aspects which should reliably reflect the consumption of the economic benefits incorporated in purchased goodwill.
The valuation of intangible assets is also commonly used in performing transfer pricing analysis and determining the appropriate arm’s length fair value of cross-boarder transactions. As this is a focus area of SARS as required by Section 31 of the Income Tax Act, the transparency, reliability, and independence of these valuations is important.
Merchantec Capital has the expertise and experience to perform the valuation of complex intangible assets/goodwill which can be relied upon from both an internal management perspective as well as for external purposes, such as purchase/sale agreements or audit requirements.
Valuation Services
Company Valuations
The purpose of performing a company valuation is to gain an independent view of the estimated amount for which an asset should exchange on the effective valuation date between a willing buyer and seller in an arm’s length transaction.
Independent Expert Report
In compliance with the South African Companies Act, 2008, companies are required to obtain an IER to provide shareholders with an opinion as to whether a transaction is fair and/or reasonable.
Fairness Opinions
A fairness opinion is a report prepared by a JSE approved independent expert, expressing an opinion on whether a transaction is fair/unfair to shareholders.
Purchase Price Allocation Valuation
The PPAV process is one whereby the fair value of all significant business intangible assets, including goodwill, and liabilities of an acquired enterprise must be determined in accordance with IFRS 3: Business Combinations.
Option Valuations
Option valuation estimates the value of unique financial instruments, including share-based payments, employee incentive schemes and general share options.
Fund Valuations
Independent valuation of underlying investments in funds and investment holding companies.
