There are various situations which give rise to the need for the valuation of options or other financial instruments. This can include valuations of businesses where these instruments form part of the ownership structure, or specific transactions that include a share based consideration as defined in terms of the accounting standard IFRS 2.

The valuation is performed using complex models, with the two common models being a Binomial model and the Black Scholes model. These models take into account a variety of inputs and assumptions, such as:

  • The duration of the option;
  • The share price and volatility of returns;
  • The dividend yield;
  • The likelihood that options will not be exercised; and
  • The risk-free rate.

Share based payments can be a considerable expense and thus the use of an expert will reduce the risk of non-compliance with IFRS 2 as well as ensuring that all factors have been adequately considered to ensure that an accurate determination has been completed and disclosed.

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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.

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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.

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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.

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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.

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Intangible Asset & Goodwill Testing Valuation

Our team values an entity’s non-physical assets which generate a measurable economic benefit to the owner, such as customer relationships and brand. Additionally, we provide goodwill testing valuations which is an annual requirement of IFRS 36: Impairment of Assets.

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Fund Valuations

Independent valuation of underlying investments in funds and investment holding companies.

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