VALUATION Corp. provides business valuation services in Moscow and other Russian regions
For businesses facing financial difficulties, financial reorganization accompanied by technical modernization often proves to be a more economically feasible option than liquidation or split up. The answer as to what option is more advantageous can be provided after an independent valuation of the company.
In case of business restructuring, an independent valuer can help to find the best asset management solution both from the economic and legal perspectives. In merger, acquisition, division, or split-up of the company, an independent valuation of assets will help to establish the fair share of each shareholder (partner), reflecting the partner’s actual contribution to the shareholders’ capital.
In case of liquidation of a company and total sale of its assets, which previously comprised an integral production complex, an independent valuer can advise the best method of assets division in order to minimize financial losses. First, the valuer can conduct valuation of the company as an income-earning property complex and then value each asset on a stand-alone basis; comparison of these value indicators will provide benchmarks for making accurate management decisions.
If the owners of the restructured company include state or government bodies, an independent valuation of the company’s assets is required by the law in Russia. Valuation of the market value of assets is also required in the event of withdrawal of one or more founders from the company in order to determine the amount of entitlement payments. An independent valuation is especially important in this case, because in Russia the valuation report has the status of a public document of evidential significance and can be used by the court to quantify entitlement payments.
Documents and information required for business valuation:
- Copies of company’s icorporation documents.
- Brief description of the mane areas of activities and organizational structure of the company.
- Accounting records for the last 3-5 years or for a feasible number of prior periods (balance sheet and P&L for each year).
- Most recent auditor’s report (if audited).
- Fixed assets schedule.
- Property inventory lists.
- Information about all assets (real estate, inventories, shares of unrelated companies, bills, intangible assets, etc.)
- Analysis of accounts payable.
- Analysis of accounts receivable:
- aging analysis;
- by categories of receivables;
- proportion of doubtful debts.
- Information about affiliated companies (if any) and their financial documents.
- Company’s plan of development for the next 3-5 years indicating expected revenues from each product/service, required investments, expenditure, net income in each year (if any).
This list of required documents and information is preliminary and may be reduced or expanded after the valuer’s detailed review of the valuation assignment, depending on valuation purpose.
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