Folks,
Herewith I have given below the link for WIRC Batch - Day 2 - Presentation made in Fast Track Webinar Series for IBBI Valuation Exam (SFA) on "Valuation Approaches and Methods"
Overview of Valuation - (4 Marks)
- Meaning of value: Difference between price and value; definition of Value
- Types of value: fair market value, fair value, intrinsic value, investment value, synergistic value, market value, special value
- Premise of valuation: going concern and liquidation
- Purpose of valuation: mergers and acquisitions, strategy evaluation, identification of under and overvalued assets, legal, financial reporting, scope of work
- Valuation standards (New Topic included)
- Valuation process: understanding the business; planning and preparation; forecasting company performance; selecting the appropriate valuation model; converting forecast to valuation; applying analytical results in the form of recommendations; conclusions
- Valuation report and documentation: scope of the work performed, approach adopted, method applied, key inputs used, assumptions made, conclusion(s) of value and principal reasons for any conclusions reached, and date of report, date of valuation
- Importance of documentation, nature and purpose of documentation, timely preparation of documentation, documentation of valuation procedures performed, assembly of the final documentation, ownership of documentation
Valuation Approaches - (3 Marks)
- Cost approach: net asset value and book value, adjusted value, sum of the parts, replacement cost
- Market approach: quoted market price, price of recent investment and price of recent transaction, relative valuation, concept of multiples, selection of appropriate comparables; adjustments to multiple calculated in accordance to size, lines of operation and geographical areas of operation
- Income approach: discounted cash flow approach; terminal value; present value; adjusted present value approach; internal rate of return; cash flow analysis- end of year and mid of year conventions; earning capitalization method /yield method; concept of perpetual growth; concept of cost of capital and capitalization rate
- After investing substantial amount of time and Himalayan size of Efforts, Research & Pain; this material is brought out.
- Your acknowledgement (with your name, location & contact no) in this blog by few words will be an encouragement for this Hard Work
Link for GKR Notes / BGM used in Day 2 - Webinar
Link for GKR Excel Worksheet used in Day 2 - Webinar
Link for International Private Equity and Venture Capital Valuation Guidelines - IPEV (PDF) - December 2018
Link for International Valuation Standards - IVSC (PDF) - January 2020
Link for CBV Institute Practice Standard No 110 - Valuation Reports (PDF) - June 2009
Kindly post your comments, suggestions, queries & review of the webinar session below this post. Happy Reading | Please contact 95031 11836 Pimpri Chinchwad Branch of WIRC of ICAI for being part of Fast Track WhatsApp group.
GKR
19th APR 2022 | Tuesday
Sir, your lecture series is really good to listen to. What I found really wonderful, when a query comes in listener's head, generally it's answered automatically in next few minutes. Sorry not being able to have dialogue as I am with clamouring coffee crowd at that time in the morning. But I do listen and will ask questions in writing. Thank you for your sincere efforts on the topic.
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