Business and Intangibles Valuation Services
Some of the common situations that give rise to a valuation include:
• Tax related transactions;
• Shareholders disputes; buy/sell agreements, acquisition/disposal of equity stakes or joint ventures
• Corporate restructurings/Business reorganizations;
• Financial reporting (Purchase price allocation, impairment testing);
• Mergers, acquisitions and divestments;
• Litigation support, expert witness;
• Valuation of Emerging Technologies like Artificial Intelligence, Crytocurrency etc;
• Intellectual Property Rights ("IPR") Valuation Report in accordance with Section 19B of the Singapore Income Tax Act
• Calculating and Assessing Damages resulting from breach of contract, copyright/patent infringement etc.
Our in-house expert held the following qualifications like:
the Chartered Valuer & Appraiser (CVA) from Singapore Accountancy Commission;
International Certified Valuation Specialist (ICVS), International Association of Certified Valuation Specialists (IACVS);
Certified Valuation Analyst (CVA) of the National Association of Certified Valuators and Analysts (NACVA), North America;
Chartered Business Valuer (CBA) from the Canadian Institute of Chartered Business Valuation (CICBA);
Certified Patent Valuation Analyst, from the Business Development Academy.
Acquisition and Disposal of Shares Valuation (IFRS 3 or FRS 103)
IFRS 3 lays down the requirement for the accounting of business combinations, and require use of fair value estimated that are derived from the Fair Value Measurement Framework for financial reporting. We assist to derive an indicative price before an acquisition strategy is developed. We also perform valuation of companies who wish to dispose off their business.
Fair Value Measurement (IFRS 13 or FRS 113)
Specialists valuation reviews of fair value measurements prepared by a third party or by management; firm review of fair value measurements prepared by the firm’s valuation team; reviewing and signing valuation reports; performing, mentoring, supervising or managing fair value measurement engagements; and consulting on, instructing, authoring, developing thought leadership and staff development on fair value measurement matters.
We provide fair value measurements for businesses, business interests, intangible assets, certain liabilities, and inventory for financial reporting purposes. Financial statements issued for financial reporting purposes include, but are not limited to, financial reports issued by the following:
Entities required to submit registration statements or filings to the SEC
Privately held entities that prepare and issue financial statements in accordance with United States generally accepted accounting principles (U.S. GAAP)
Any other engagement where the individual is performing services as a valuation professional.
Purchase Price Allocation (PPA) under IFRS 3 Business Combinations
International Financial reporting standards (IFRS) enforce strict guidelines for the business combinations. Purchase price allocation (PPA) serve to enhance the transparency of the activity processes and identify the true value of the assets.
Purchase price allocation (also known as “Assets and Liabilities Valuation”) is the process of assigning fair values to all major assets and liabilities of an enterprise, either following a merger or an acquisition. Assets included can be either tangible (machinery and equipment, property) or intangible (customer relationships/lists, trademarks, intellectual property, goodwill or other intangibles).
Impairment Testing (IAS 36 or FRS 36 Intangible assets)
We carry out impairment testing for listed and unlisted companies as defined under the accounting standards, which is a requirement to conduct such impairment test for its assets to see whether it has incurred any impairment losses. The purpose is to ensure assets are not carried at amounts that exceed their recoverable amounts or, more simply, that assets are not overstated.
Financial Instruments Valuation (IAS 39 or FRS 109)
We keep ourselves abreast of the latest development in accounting standards, especially the newly introduced FRS 109 and we apply the latest valuation model such as “Black-Scholes-Merton Model”, “Binomial-Option Pricing Model” and “Monte Caro Simulation Method”, to compute the fair value of various financial instruments.
Some of the financial instruments include
Call and put options
Convertible bonds and preference shares
Forward and futures contracts
Employee share options scheme (ESOS) and share based performance plans
Warrants (listed and non-listed), adjustment of exercise price of warrants/ESOS
Swap contracts and other structured products like Asset backed securities
Employee Share Options Plan ("ESOP/ESOS") (IFRS 102 or FRS 102)
Singapore Financial Reporting Standards ("FRS 102") or (IFRS 2 Share Based Payments) require that costs relating to share based payments be accounted for in their financial statements. We can help business to estimate share based expenses through the use of option pricing valuation models like Binomial or Black Scholes Model.
Intellectual Property Rights (Section 19B of Income Tax Act)
Benefit: Able to claim Writing Down Allowance (WDA) for Acquisition of Intellectual Property Rights
To enhance Singapore’s attractiveness as a business hub to hold and commercialise IPRs (e.g. patents, trademarks, copyrights, trade secrets, registered designs, etc.), writing-down allowances (“WDA”) are granted on qualifying capital expenditure incurred in acquiring IPRs under Section 19B of the Singapore Income Tax Act.
Conditions for claiming WDA
For example, if a company acquires a trademark for SGD 10 million in the financial year ended 31 December 2018, it will be able to claim WDA over a straight-line basis over a 5, 10 or 15-year period. Once claimed, it cannot be deferred. The company need to employ or engage the expertise of an independent valuer to issue a valuation report. This report needs to be submitted at the time of filing of its income tax return for the first year of assessment in which the company qualifies for WDA.
Who can value IPRs ?
The Comptroller of Income Tax or IRAS requires a valuation of the IPRs to be made by an appropriate valuer (e.g. Chartered Valuer & Appraiser (CVA) or Chartered Accountant) to determine the open market price of the qualifying IPRs when the capital expenditure incurred is: a) greater than SGD 0.5 million (for a related party transaction) b) greater than SGD 2 million (for an unrelated party transaction)
We also quantify losses in IP disputes and damages in respect to patents and other intellectual property infringment.
Intangible Assets and Patents Valuation (IAS 38 or FRS 38)
We provide independent and accurate analysis and valuation opinion of the intangible assets of our clients during corporate exercises like acquisitions of local or overseas companies via asset or share transfer, initial public offering (IPOs) and special audit reviews commissioned. Our reports are submitted and validated by Singapore Exchange, local bankers, corporate finance houses, lawyers, auditors and potential investors.
Some of the intangible assets that we are involved include:-
Distributions and publicity rights
Technological inventions and software copyrights
Trademarks and patents
Death Estate Valuation, Litigation, Tax & Matrimonial Disputes
If your business are caught in legal dispute matters relating to business, commercial and matrimonial/family/divorce proceedings, we can provide valuation of shares / business, trial preparation and expert testimony. We also specialise in helping our clients who face disputes regarding their personal or corporate tax matters that require valuation expertise.
We also provide litigation support for clients and act as expert witness in Court proceedings.
Damages assessment due to Personal injury /Economic losses
When an individual sustains a physical injury due to the action or inaction of another person (often related to a motor vehicle), the individual may seek compensation. Often, we are asked to assist with the quantification of these damages. We also assist in valuing losses arising from contracts used in the construction industry, the types of losses that may arise if those contracts are breached (i.e., the types of claims which may arise), and the documents required for supporting a claim for damages.