highway-2025863_1920

architecture-828596_1920-darkbanner

For most of the transactions nowadays, cash is no longer the only item to be paid as consideration. It is becoming more popular to structure a transaction with the involvement of various types of financial instruments, for instance, Convertible Bonds and Notes, Preference Shares, Warrants, Forwards, Call and Put Options, Embedded Derivatives, etc. Hence, an independent financial instruments valuation may be required for financial reporting of both public and private companies, according to relevant accounting standards including HKFRS/IFRS 2 and US GAAP ASC 718 and HKFRS/IFRS 9 and US GAAP ASC 326.
 
The structures of financial instruments are becoming more complex with the various clauses embedded in the terms and agreements. Based on our knowledge on different valuation methodologies and our prior experiences, AVISTA manage to customize the most appropriate business valuation model to capture the terms and clauses of the particular instruments precisely. In addition to the widely adopted binomial model and Black-Scholes model, trinomial model and Monte-Carlo model is sometimes an alternative in financial instruments valuation.

tech-3041437_1920

Financial Instruments Valuation

Business Valuation is a process to estimate the fair value of a company’s business, including its assets and liabilities, where a Business Valuation specialist takes consideration of a wide range of factors ranging from macroeconomic conditions to industry environment, from the business model of a company to its financial performance.
 
Business Valuation plays a key role in strategic planning and business decision-making in various contexts such as pre-IPO financing and group restructuring. The company’s management will be able to obtain a reliable quantitative assessment in relation to the company’s worth and business potential with the aid of Business Valuation. There are numerous needs and requirements the company needs to take into account across different stages of company development.
 
The Needs of Business Valuation
Along the road of a company being a start-up to a publicly listed company, Business Valuation provides a means and well-rounded analysis to the company’s management for financial information disclosure and decision-making.
 
<img src="../../../../../uploads/stages_of_development_68b7203bf7.JPG" width="700" height="221" />
 
<ul>
<li>Corporate Fundraising
<ul>
<li>Business Valuation assesses the intrinsic value of a company on which the negotiation between the company’s management and the potential investors is based for the details of the term sheet, including but not limited to the form of investment, investment amount, protective provisions. </li>
</ul>
</li>
<li>Group Restructuring
<ul>
<li>To ensure an unbiased and reasonable transaction price and terms in relevant transactions during the process of restructuring, business Valuation provides an assisting tool for the company that considers corporate restructuring to streamline its structure and businesses for public investment.  </li>
</ul>
</li>
<li>Share-based Compensation Scheme
<ul>
<li>Business Valuation quantifies the relevant expenses of employee share options (“ ESO”) that are increasingly adopted before going public to align the interests between the employees and shareholders for talents motivation in hopes of business development, by which the company’s management is capable of utilising sensitivity analysis to assess the impacts of ESO in advance for improving budgeting. </li>
</ul>
</li>
<li>Financial Reporting
<ul>
<li>Business Valuation supports the company to meet the requirements of financial information disclosure incorporated into the Listing Documents or annual reports, at the time of being an IPO applicant or being a publicly listed company. </li>
</ul>
</li>
<li>Major Transaction Disclosure
<ul>
<li>As companies are required to disclose certain information in the announcement, Business Valuation assists the company present the fair value of the assets or business in a major transaction, including but not limited to the aggregate value and determination basis of the consideration, as well as the value of the subject assets in the transaction. </li>
</ul>
</li>
</ul>
Types of Valuation Approach in Business Valuation 
<ul>
<li>Income Approach
<ul>
<li>The fundamental method for income approach valuation is the Discounted Cash Flow (“DCF”) method. Under the DCF method, the value depends on the present value of future free cash flow of a company. The future cash flow is discounted at the market-derived rate of return appropriate for the risks and hazards of investing in a similar business. </li>
</ul>
</li>
<li>Market Approach
<ul>
<li>The market approach provides an indication of value by comparing the subject asset to similar assets that have been sold in the market, with appropriate adjustments for the differences between the subject asset and the assets that are considered to be comparable to the subject asset. There are two common methods under the market approach in this process of Business Valuation, namely the Comparable Transaction Method or the Comparable Company Method. </li>
</ul>
</li>
<li>Asset-based Approach
<ul>
<li>The asset-based approach considers the cost of re-manufacturing or replacing the assets to new based on the prevailing market price of similar assets, taking into account the past and current maintenance policies and refurbishment records, and deducting the accumulated depreciation caused by the condition, usage, age, wear or obsolescence (structural, functional or economic). This Business Valuation approach is adopted only when the income approach and market approach are not applicable, for instance under a liquidation scenario, as it does not reveal the future economic benefit of a company. </li>
</ul>
</li>
</ul>
AVISTA Business Valuation Advisory
 
Business Valuation is of vital importance to strategic decision-making and financial information disclosure. With our extensive financial knowledge and experience, AVISTA Business Valuation team is capable to provide a fair and reliable quantitative assessment on your growing company’s worth and business potential.
 
Explore our <a href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory">Business Valuation services</a> now.

120759184_m.jpg

How to Value a Company? A Quick Guide on Business Valuation

The value of a company’s asset, both tangible and intangible, could be impacted by external economic conditions and volatile financial markets. As a result, companies are required to measure and report the corresponding losses arising from impaired assets according to relevant accounting standard including HKAS/IAS 36 and US GAAP ASC 350. AVISTA offers business valuation and accounting expertise to conduct impairment testing on goodwill, tangible assets and definite/indefinite-lived intangible assets.

team-4503157_1920

Goodwill and Assets Impairment Assessment

In every merger and acquisition transaction, acquirers are often required to measure the fair values of the tangible and intangible assets as of the completion date of transaction in accordance with relevant accounting standards such as HKFRS/IFRS 3(R) and US GAAP ASC 805. Commonly identifiable intangible assets include Trademark and Brand Name, Customer Relationship, Technology, In-progress R&amp;D, Patent, Intellectual Property, Copyright, Franchise Agreement, Favorable Lease, Non-compete Agreement, etc.
 
Our finance and accounting expertise, together with our extensive industry knowledge and practical business valuation skills, is capable of performing such valuations for financial reporting or internal reference purposes.

technology-792177_1920

Purchase Price Allocation (PPA) Valuation

<h1>Business Valuation</h1>
<h2>Business Valuation: Hong Kong and China</h2>
Our well-developed Business Valuation services include carefully documented valuation methodologies and procedures with clear business value conclusion helping your mergers and acquisitions (“M&amp;A”) or investment decision making.
<h3> </h3>
<h3>What is the Next Step for Your Growing Business and How Can We Help on Your Business Valuation Assignment? </h3>
<table style="border-collapse: collapse; width: 99.8382%; height: 231px; border-color: #ECF0F1;">
<tbody>
<tr style="mso-yfti-irow: 0; mso-yfti-firstrow: yes; mso-yfti-lastrow: yes; mso-prop-change: 'Samantha Wong' 20210521T1609;">
<td style="width: 46.2379%; height: 10px; background-color: #ecf0f1; text-align: left;" width="312">
<img src="../../../../../uploads/deal_1ae7d3aeea.png" width="50" height="50" />
Considering a deal? 
</td>
<td style="width: 49.4129%; height: 10px; background-color: #ecf0f1;" width="312">
<ul>
<li>
<a href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Purchase-Price-Allocation-PPA-Valuation">Purchase Price Allocation (PPA) Business Valuation</a>
</li>
<li>
<a style="color: #000000;" href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Financial-Instruments-Valuation">Financial Instruments Valuation </a>
</li>
</ul>
</td>
</tr>
<tr style="height: 140px;">
<td style="width: 46.2379%; height: 10px; text-align: left;">
<img src="../../../../../uploads/public_5b2c355674.png" width="50" height="50" />
Ready for going public?
</td>
<td style="width: 49.4129%; height: 10px;">
<ul>
<li>
<a style="color: #000000;" href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Valuation-for-Circular-Disclosure">Business Valuation for IPO &amp; Circular Disclosure</a>
</li>
</ul>
</td>
</tr>
<tr style="height: 10px;">
<td style="width: 46.2379%; text-align: left; height: 10px; background-color: #ecf0f1;">
<img src="../../../../../uploads/expansion_a9a77dac6c.png" width="50" height="50" />
Planning for expansion?
</td>
<td style="width: 49.4129%; height: 10px; background-color: #ecf0f1;">
<ul>
<li>
<a style="color: #000000;" href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Valuation-for-Capital-Financing">Business Valuation for Capital Financing</a>
</li>
</ul>
</td>
</tr>
<tr style="height: 90px;">
<td style="width: 46.2379%; text-align: left; height: 90px;">
<img src="../../../../../uploads/investment_f884cfd720.png" width="50" height="50" /> Making investment decisions?
</td>
<td style="width: 49.4129%; height: 90px;">
<ul>
<li>
<a style="color: #000000;" href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Venture-Capital-and-Private-Equity-Portfolio-Valuation">Venture Capital and Private Equity Portfolio Valuation</a>
</li>
<li>
<a style="color: #000000;" href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Transfer-of-Intellectual-Property">Transfer of Intellectual Property</a>
</li>
</ul>
</td>
</tr>
<tr style="height: 111px;">
<td style="width: 46.2379%; text-align: left; height: 111px; background-color: #ecf0f1;">
<img src="../../../../../uploads/report_36e3e28917.png" width="50" height="50" />
Fulfilling the financial reporting requirements ?
</td>
<td style="width: 49.4129%; height: 111px; background-color: #ecf0f1;">
<ul>
<li>
<a style="color: #000000;" href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Share-Based-Payment-Valuation">Share-based Payment Valuation</a>
</li>
<li>
<a style="color: #000000;" href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Goodwill-and-Assets-Impairment-Assessment">Goodwill and Assets Impairment Assessment</a>
</li>
<li>
<a style="color: #000000;" href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Expected-Credit-Losses-ECL-Assessment">Expected Credit Losses (ECL) Assessment</a>
</li>
<li>
<a style="color: #000000;" href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Valuation-for-Tax-Purpose">Valuation for Tax Purpose</a>
</li>
</ul>
</td>
</tr>
<tr>
<td style="width: 46.2379%; text-align: left;">
<img src="../../../../../uploads/other_services_0ce6f0e7b6.png" width="50" height="50" />
Other Business Valuation services:
</td>
<td style="width: 49.4129%;">
<ul>
<li>
<a style="color: #000000;" href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Mining-Valuation">Mining Valuation</a> 
</li>
<li>
<a style="color: #000000;" href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Biological-Assets-Valuation">Biological Assets Valuation</a> 
</li>
<li>
<a style="color: #000000;" href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory/Service-Concession-Arrangements-Analysis">Service Concession Arrangement Analysis</a>
</li>
</ul>
</td>
</tr>
</tbody>
</table>
 
<h3>What Type of Assets Can We Value? </h3>
 
<table style="border-collapse: collapse; width: 99.8382%; height: 368px;">
<tbody>
<tr style="height: 57px;">
<td style="width: 29.4689%; height: 57px; background-color: #ecf0f1;" width="284">
<img src="../../../../../uploads/e_7a69119cd4.png" width="50" />
Equity Investment
</td>
<td style="width: 68.2261%; height: 57px; background-color: #ecf0f1;" width="284">
<ul>
<li>Equity and Debt Interests</li>
</ul>
</td>
</tr>
<tr style="height: 96px;">
<td style="width: 29.4689%; height: 96px; background-color: #ffffff;" width="284">
<img src="../../../../../uploads/f_1a8964b4e4.png" width="50" />
Financial Instruments
</td>
<td style="width: 68.2261%; height: 96px; background-color: #ffffff;" width="284">
<ul>
<li>E.g. Convertible Bonds and Notes, Preference Shares, Warrants, Forwards, Call and Put Options and Embedded Derivatives, etc.</li>
</ul>
</td>
</tr>
<tr style="height: 118px;">
<td style="width: 29.4689%; height: 118px; background-color: #ecf0f1;" width="284">
<img src="../../../../../uploads/i_7b8744eb81.png" width="50" />
Intangible Assets
</td>
<td style="width: 68.2261%; height: 118px; background-color: #ecf0f1;" width="284">
<ul>
<li>E.g. Trademark and Brand Name, Customer Relationship, Technology, In-progress R&amp;D, Patent, Intellectual Property, Copyright, Franchise Agreement, Favorable Lease and Non-compete Agreement, etc.</li>
</ul>
</td>
</tr>
<tr style="height: 97px;">
<td style="width: 29.4689%; height: 97px; background-color: #ffffff;" width="284">
<img src="../../../../../uploads/t_bbd43ce227.png" width="50" />
Tangible Assets
</td>
<td style="width: 68.2261%; height: 97px; background-color: #ffffff;" width="284">
<ul>
<li>Biological Assets and Mine</li>
<li>Real Estate, Machinery and Equipment and Inventory etc. (see our <a href="https://www.avaval.com/en/our-services/Property-Valuation-Advisory">Property Valuation services</a>.)</li>
</ul>
</td>
</tr>
</tbody>
</table>
 
Explore our full suite of <a href="https://www.avaval.com/en/our-services/Business-Valuation-Advisory">Business Valuation Services</a>. 
<img src="../../../../../uploads/119182402_m_64fba32c0f.jpg" width="350" />
<h3>Our Core Expertise in Business Valuation</h3>
<ol>
<li>Business valuation experts with global qualifications such as CFA, CPA, CPV, FRM, MRICS </li>
<li>Our strong track record of more than 800 clients on our Business Valuation service</li>
<li>Over 10 years in the market on Business Valuation: Hong Kong, China and APAC region</li>
</ol>
<h3> </h3>
<h3>AVISTA Business Valuation Advisory</h3>
AVISTA provides a full range of Business Valuation Advisory services for various purposes, including M&amp;A transactions, financial reporting, stock exchange listing rules compliance, tax planning and internal reference. Our Business Valuation Advisory services cover areas including but not limited to business valuation, real estate, plant and equipment, financial instruments, biological assets, mining assets and intellectual properties.
 
<a href="https://www.avaval.com/en/contact-us">Contact us</a> for your next Business Valuation project.

phone-869669_1920.jpg

Business Valuation

Companies may adopt various forms of share-based payments, such as Employee Stock Options, Restricted Stock Units, Stock Appreciation Rights, etc., as a form of incentive nowadays. AVISTA is capable to assist companies in meeting the requirements of relevant accounting standards such as HKFRS/IFRS 2 and  US GAAP ASC 718  in relation to share-based payment transactions to ensure that the impact of these transactions is correctly reflected in financial statements. Even more, AVISTA can also perform scenario analysis to assist companies in assessing the impacts of these share-based payments on the financial statements in advance for determining the appropriate structures, terms and vesting conditions that could meet your financial budget.

Share-Based Payment Valuation