What is the cost standard. Tests for self-preparation for the exam in the section "The place and role of valuation in the financial and credit sphere

Generally accepted value standards in business valuation are a set of valuation requirements.

There are four main business valuation standards:

reasonable market value;

reasonable cost;

· investment cost;

intrinsic (fundamental) value.

All of these standards assume that the valuation is done based on the so-called free, not forced (including those or other administrative interventions), transactions to acquire a business or its shares.

In particular, the buyer cannot be required to repay capital investments in the enterprise's investment projects that were previously started in order to receive subsequent significant positive flows. Under the conditions of a free transaction, the buyer of an enterprise (a block of its shares) is ready to pay for it (the corresponding block of shares) to the maximum exactly as much as he himself can receive from profits for the entire period of operation of the acquired business ( cash flows) of the acquired business.

The main differences between these standards are as follows.

The fair market value standard assumes that a business (investment project) is assessed on the basis of information (about property, current and forecast market conditions and purchased resources, etc.), which is equally available to any potential buyer and seller of a business, to any investor. The business opportunities of any potential investor (in particular, project financing, sales) are also considered equal and unlimited.

The standard of fair value involves the valuation of a business on the basis of information that is equally accessible to a particular buyer and seller of the business. Their business opportunities are also assumed to be the same.

The investment value standard assumes the valuation of a business (investment project) only on the basis of the awareness and business capabilities of a particular investor (hence, according to this standard, the valuation of the same project will be different for different potential investors).

The standard of internal (fundamental) cost involves the evaluation of a business (project) by a third party independent appraiser on the basis of his own awareness and ideas about the business opportunities of the investor (which does not exclude the provision to the appraiser, at his request, of the information necessary for the assessment, which he will correct).

It is usually believed that the most objective assessment of a business (project) as such (regardless of who will run the business - implement the project) meets the standard of reasonable market value. At the same time, the most practical is the standard of investment value, which takes into account that in practice it is difficult to separate the assessment of the project as such from its capabilities. in the best possible way evaluate and implement that a particular investor possesses. The influence of business valuation standards is most pronounced when forecasting cash flows (profits and losses) for the project. In terms of determining the discount rate, the impact of these standards is related to the extent to which commercial and financial information on the level and fluctuation of income from investments in the industry under consideration is available for different subjects of project evaluation.

If the valuation uses only publicly available information of this kind, then the valuation is more likely to meet the fair market value standard. If non-public information is used, the valuation is more likely to meet the standard of investment value.

The fair market value standard, although it may seem too theoretic, is already used in the world (mainly in Anglo-Saxon countries) to determine the taxable base for property tax in terms of financial assets of enterprises that have shares of closed subsidiaries on their balance sheets. At the same time, the relevant laws require that the specified taxable base be the justified market value of affiliated closed companies determined by special business valuation methods, proportionally reduced in accordance with the share of the parent company in the subsidiary.

This requirement determines that Western corporations-taxpayers are forced - in order to protect themselves from claims tax office- involve prestigious appraisal firms, most often large audit companies, in the assessment of the reasonable market value of their subsidiaries and controlling stakes in them.

The fair value standard is most applicable in Western practice when minority shareholders challenge through the court transactions for the purchase of shares from them by larger shareholders of the same enterprises on the basis of claims against the latter regarding non-compliance with the specified standard when preparing the contractual sale price of the specified standard. The claim is that the majority shareholders in such cases often do not provide the transaction counterparty (minority shareholder) with the information about the true market prospects of the enterprise and the true market value of its property, from which they themselves proceed when determining the maximum allowable prices for the company's shares. Proved such information asymmetry can lead to the cancellation of the transaction in question.

Obviously, this situation has direct analogies in domestic practice, when larger shareholders and managers of privatized enterprises, on the basis of similar information asymmetry (often reinforcing it with the dissemination of false information about the underestimated prospects of the company), buy up small blocks of shares from employees of privatized enterprises, who, moreover, the payment of wages is delayed.

The investment value standard assumes that business valuation is carried out on the basis of awareness of the property and market prospects (in sales markets and markets for purchased resources) of the enterprise of its particular investor (buyer or seller). The role is also played by the business opportunities of a particular investor - the assets he has outside the scope of the transaction for the sale of an enterprise (increasing its value "in the eyes" of such an investor) that can be used to develop a business instead of allocating special financing for the purpose of acquiring them or creating their own forces. The creative possibilities (business fantasy) of the investor are also important, etc.

Just as an electric current will flow between the poles when there is a potential difference between them, so the transaction for the purchase and sale of an enterprise (a block of its shares) will take place under conditions when the investment value of the same enterprise from the point of view of the seller is lower, than its investment value from the buyer's point of view.

The investment value of the enterprise from the point of view of an external investor-buyer is called the external value of the enterprise.

The investment value of an enterprise from the point of view of its current managers is called the value of the enterprise "as is"

The standard of the internal (fundamental) value of the enterprise requires that the business be valued not only on the basis of information from an independent analyst, who must take into account in this assessment all the factors affecting the assessment, but also taking into account the fact that the specified analyst is not forced to request information from one of the interested in the assessment of the parties (seller or buyer of the enterprise), thereby exposing themselves to dependence on it.

practical conclusion from the above, it turns out that an independent analyst (appraiser), in order to meet the standard of intrinsic (fundamental) value, must have own experience work in the industry of the enterprise in question and its own independent information about it.

The standard of internal (fundamental) cost also assumes that the enterprise in question should be evaluated by all existing business valuation methods - with the final assessment obtained as a weighted average of all determined different methods valuations (where specially justified coefficients of the appraiser's confidence in the results of applying one or another valuation method in a particular valuation situation should act as weight coefficients).

Control questions for self-test

List the purposes of the valuation financial institutions.

Name the stages of evaluation of financial institutions.

Name the main regulatory legal acts regulating the valuation of financial institutions in the Russian Federation.

List what an appraiser should know to determine the market value of financial institutions?

Describe the market value standards of financial institutions.

Literature

Business valuation. Textbook for high schools. S.V. Valdaytsev. Moscow: UNITI, 2007.

Business valuation. Textbook for high schools. V. Esipov, G. Makhovikova, V. Terekhova. Peter: Book Lover, 2006

Business Valuation: Textbook / Ed. Gryaznova A.G., Fedotova M.A. - M .: Finance and statistics, ed. second, 2004.

Theoretical basis restructuring. A.F. Kryukov. Proc. allowance / Krasnoyar. state un-t, 2009.

Panova G.A. Analysis of the financial condition of a commercial bank. Finance and Statistics, 2007.

Federal Law "On valuation activities in the Russian Federation" No. 135-FZ dated July 29, 1998 (as amended federal laws dated 21.12.2001 No. 178-FZ, dated 21.03.2002 No. 31-FZ, dated 14.11.2002 No. 143-FZ, dated 10.01.2003 No. 15-FZ, dated 27.02.2003 No. 29-FZ, 22.08.2004 No. 122 -FZ).

Regulations on the licensing of valuation activities (approved by Decree of the Government of the Russian Federation dated April 11, 2001 No. 285).

Valuation standards that are mandatory for use by subjects of valuation activities (approved by Decree of the Government of the Russian Federation of July 6, 2001 N 519)

Decree of the Government of the Russian Federation "On authorized body on control over the implementation of valuation activities in the Russian Federation” dated 20.08.1999 No. 932.

In this broadest sense, the subject of business valuation is understood in two ways.

Its first understanding comes down to the now traditional in our country (but not historically - see box below) understanding of business valuation as the valuation of a firm as a legal entity. For this understanding, also - according to the tradition of the economy, where only legal entities having a certain property on the balance sheet - it is typical to identify the valuation of the business of firms with the valuation of the property of these firms.

The second - more common in the world - understanding of business valuation is to find out how much it costs not firms that earn certain incomes, but property rights, technologies, competitive advantages and assets, tangible and intangible (the latter do not necessarily reflect the corresponding technologies and benefits) that make it possible to earn these incomes.

Therefore, in order to justify the exchange ratios used (and thereby avoid later possible lawsuits by minority shareholders), it is necessary to first evaluate the enterprises whose shares are exchanged.

The same problem arises and is also solved when preparing mergers of companies with an exchange of shares between the co-owners of these companies or between the companies themselves.

3) Business valuation is used when assessing a property contribution to the authorized capital of newly created firms, if property is contributed in the form of blocks of shares, which then are subject to valuation.

4) Finally, the assessment of enterprises can be useful in relation to those open companies whose shares are traded on the stock market and are even highly liquid (such as "blue chips").

Particular attention is paid to the valuation of assets during the liquidation of an enterprise, in the valuation of a holding company, repair and construction organizations. This is explained by the fact that a liquidated enterprise, as a rule, does not generate income and it is not possible to evaluate it using the income method. The holdings themselves, do not directly carry out production activities, and income is received mainly by their subsidiaries.

And for the start of work and the subsequent functioning of repair and construction organizations, it is important to connect various assets. When evaluating the assets of enterprises, it must be remembered that the value of assets very rarely coincides with the value of the shares of this enterprise. Therefore, special methods are used to convert the value of assets into the value of shares.

In this case, use the information contained in the constituent documents certifying the ownership of this enterprise.

Info

Appraisal activity consists in obtaining an idea of the value of the object of appraisal or the size of the owner's share at a particular point in time. Market value is the most probable price at which the property can be sold for open market in a competitive environment, if the parties act reasonably, having all the necessary information, and provided that any extraordinary circumstances do not affect the value of the transaction. Investment value involves assessing the value of an enterprise for a particular investor or group of investors.

The investment value is determined based on individual investment requirements. Reproduction cost is the cost of reproducing an exact replica of a business or other asset, even if there are more economical alternatives.

The following basic business valuation standards are distinguished: answer options

This requirement causes the fact that Western corporations-taxpayers are forced - in order to protect themselves from the claims of the tax inspectorate - to involve prestigious appraisal firms in the assessment of the reasonable market value of their subsidiaries of closed companies and controlling stakes in them, the role of which is most often played by large audit companies. .

Reasonable Cost Standard is most applicable in Western practice when minority shareholders contest through the courts transactions for the purchase of shares from them by larger shareholders of the same enterprises on the basis of claims against the latter regarding non-compliance with the specified standard in the preparation of the contractual sale price of the specified standard.

The income approach

· market approach;

property (cost) approach.

A gross mistake in business valuation is the application of an approach to valuation that is inadequate to determine the value, which follows from the current specific socio-economic situation with the enterprise in question.

So, if an enterprise is a city-forming enterprise (a monopsonist in the local labor market, it also bears the costs of maintaining the local engineering and social infrastructure of a small remote town or village), then the natural definition of its value (the purpose of the assessment) will, as a rule, be to assess the enterprise as operating.

Replacement cost is the cost of creating an enterprise that has an equivalent utility, but built in a new architectural style, using modern and progressive materials, structures, equipment. Salvage value, or forced sale value, is the amount of money that can realistically be obtained from the sale of a property in a time frame that is too short to be adequately marketed by the definition of market value. Mortgage value - an assessment of the enterprise at market value for the purposes of mortgage lending.
Book value is the cost of building or acquiring a property. The balance sheet value is original and replacement. The initial cost is reflected in the accounting documents at the time of commissioning.

Attention

Hello, in this article we will try to answer the question "The following basic business valuation standards are distinguished." You can also consult with lawyers online for free directly on the site.

A detailed discussion of business valuation is contained in the standard for business valuation of the American Society of Appraisers, adopted by the Business Valuation Committee in June 1991. According to American standards, business valuation is the process of preparing an opinion or determining the value of a company or the share of shareholders in its capital.

This refers to the cost of an operating (functioning) enterprise.

The earth is integral part our life and our existence. Due to its exceptional importance, it is always under the close attention of lawyers, geographers, sociologists, and economists.

Replacement cost is the cost of reproducing previously created fixed assets in modern conditions, is determined in the process of revaluation of fixed assets.

Question 3. Business valuation standards, valuation information base.

Valuation standards- evaluation rules that are mandatory for use by the subjects of valuation activities, developed and approved in accordance with the law (Table 4).

Along with the valuation standards approved by orders of the Ministry of Economic Development of the Russian Federation, Russian appraisers take into account international and European standards.

Cost standards

Generally accepted value standards in business valuation are a set of valuation requirements.

There are four main business valuation standards;

reasonable market value;

reasonable cost;

· investment cost;

intrinsic (fundamental) value.

The way in which each of these disciplines considers the land and options for its use will largely determine the fate of the peoples of the whole world.

INTERNATIONAL VALUATION STANDARDS (IVS 1 - 4)

Business valuation makes it possible to estimate the market value of the equity (authorized) capital of closed enterprises or open joint-stock companies with insufficiently liquid shares. In accordance with the Federal Law “On Joint Stock Companies”, in some cases, an assessment of the market value of share capital independent appraisers.

A deposit of $10,000 was deposited into the account at 12% per annum. How much will be in the account at the end of the second year?

The maximum value of an object is determined by the lowest price at which another object with equivalent utility can be purchased - this is ... ..

Panova G.A. Analysis of the financial condition of a commercial bank. Finance and Statistics, 2007.

Federal Law “On Appraisal Activities in the Russian Federation” No. 135-FZ of July 29, 1998 , dated January 10, 2003 No. 15-FZ, dated February 27, 2003 No. 29-FZ, August 22, 2004 No. 122-FZ).

Regulations on the licensing of valuation activities (approved by Decree of the Government of the Russian Federation dated April 11, 2001 No. 285).

Valuation standards that are mandatory for use by subjects of valuation activities (approved by Decree of the Government of the Russian Federation of July 6, 2001 No.

Therefore, today there are both national and international business valuation standards.

International Valuation Standards

As a result of long-term and fruitful cooperation between representatives of leading appraisal firms and banks, a special tool for business appraisal has been developed. It is called the International Valuation Standards. This is a fairly serious document that establishes a system of interrelated norms for conducting assessment.
The global system provides for the following basic business valuation standards:

calculation of market value;
justification and calculation of the book value;
determination of investment value;
calculation of fundamental (intrinsic) value.

In accordance with International Standards, a business is assessed as a going concern.

These include: statute, memorandum of association and a certificate of registration of the enterprise, certificates of ownership of blocks of shares, real estate and land plots; documents that describe and describe the physical characteristics of the assets of the enterprise, formulate restrictive conditions on the possession, use and disposal of the assets of the enterprise.

It is also important for the appraiser to find out the mechanism for taxing the property and profits of this enterprise. Description land plot, where the enterprise is located, should include a description of all its characteristics - area, shape, topography, orientation of the site and utility buildings, description of neighboring sites, access roads, parking lots, etc.

the value of the object for tax purposes;
special cost;

The market value in the International Valuation Standards is understood as the estimated value for which the property is expected to change hands on the date of valuation as a result of a commercial transaction between a voluntary buyer and a voluntary seller after adequate marketing; it is assumed that each party acted competently, prudently and without coercion.

Contains the main accounting entries in accordance with the Chart of Accounts for the financial and economic activities of organizations and guidelines accounting for intangible assets.

The investment value standard assumes an assessment of an enterprise (investment project) only on the basis of the awareness and business capabilities of a particular investor (hence, according to this standard, the assessment of the same project will be different for different potential investors).

The standard of internal (fundamental) cost involves the assessment of an enterprise (project) by a third-party independent appraiser based on his own knowledge and understanding of the investor’s business opportunities (which does not exclude the provision to the appraiser, at his request, of the information necessary for the assessment, which he will adjust). Classification of enterprise value standards taking into account the completeness and reliability of the information required for the assessment and its availability for a different circle of market participants, it can be reflected in the one shown in Fig.

The main reasons, of course, may be differences in the assessment of future profitability; differences in perceptions of the degree of risk; different tax situation; compatibility with other objects owned or controlled by the owner.

Value for taxation purposes the value of the appraisal object, determined for the calculation of the tax base and calculated in accordance with the provisions of regulatory legal acts (including the inventory value). Utilization cost the cost of the appraised object.

equal to the market value of the materials that it includes, taking into account the costs of disposing of the objects of assessment. Recyclable tangible assets are assets that have reached a limiting state due to complete wear and tear or an extraordinary event and have lost their original usefulness.

We can include macroeconomic and sectoral indicators (inflation rate, rates of economic development of the country, conditions of competition in the industry, etc.) as information of this kind.

Macroeconomic data - information on how the change in the macroeconomic situation that characterizes the investment climate in the country affects or will affect the activities of the enterprise.

Macroeconomic refers to the following information:

- about the stages of the economic cycle;

– economic and political stability;

– social factors: employment and standard of living of the population;

– interest rates and their dynamics;

- tax legislation and trends in its changes, etc.

The appraiser must take into account the general macroeconomic patterns of economic development when analyzing a particular enterprise and making forecasts.

At the same time, the post-forecast value of shares is determined as the sale price of this block of shares in certain time in future.

The calculation of gross revenue, that is, revenue from the sale of products (works, services), is carried out, as a rule, when evaluating enterprises that provide services on a commission basis. These are advertising, medical, consulting enterprises, publishing houses and insurance agencies, etc. When buying such enterprises, even if the profit is underestimated or not, the investor is ready to pay a price equal to the sales volume for several years in order to control a large market share of this type of product and influence to the price level.

At the same time, of course, he plans to turn a loss-making enterprise into a profitable one.

An important indicator for assessing the enterprise are its assets.

Proved such information asymmetry can lead to the cancellation of the transaction in question.

Security questions for self-examination

List the purposes of estimating the value of financial institutions.

Name the stages of evaluation of financial institutions.

Name the main regulatory legal acts regulating the valuation of financial institutions in the Russian Federation.

List what an appraiser should know to determine the market value of financial institutions?

Describe the market value standards of financial institutions.

Literature

Business valuation. Textbook for high schools. S.V. Valdaytsev. Moscow: UNITI, 2007.

Business valuation. Textbook for high schools. V. Esipov, G. Makhovikova, V. Terekhova.

Peter: Book Lover, 2006

Business Valuation: Textbook / Ed. Gryaznova A.G., Fedotova M.A. - M .: Finance and statistics, ed. second, 2004.

Theoretical foundations of restructuring. A.F. Kryukov. Proc. allowance / Krasnoyar.

The main differences between these standards are as follows.

1. The standard of reasonable market value assumes that the valuation of a business (investment project) is based on information (about property, current and forecast market conditions and purchased resources, etc.), which is equally available to any potential buyer and seller of a business, for any investor. The business opportunities of any potential investor (in particular, project financing, sales) are also considered equal and unlimited.
16 | § 3. A variety of partial market value is the value of the valuation object with a limited market, which means the value of the valuation object. the sale of which on the open market is impossible or requires additional costs in comparison with the costs necessary for the sale of goods freely circulating on the market.

This assumes the creation of a new object, which in its own way functional characteristics a close analogue of the object being valued.

The cost of reproduction is the sum of the costs in market prices, existing on the date of assessment, necessary to create an object identical to the object of assessment. Using identical materials and technologies.

Taking into account the depreciation of the object of evaluation. In contrast to the previous type of value, there is the creation of an exact copy of the appraised object, but at other current prices.

This value more accurately characterizes the current value of the object, however, its determination is often impossible due to changes in technology, materials, etc.

For example, during periods of downturn in business activity, the amount of profit received decreases, the probability of bankruptcy increases, and the value of the business decreases.

The main sources of macroeconomic information are: government programs and forecasts, periodical economic press, analytical reviews news agencies, data from the Federal State Statistics Service, legislation of the Russian Federation, Russian agencies.

External information, in addition to macroeconomic information, includes industry information: the state and development prospects of the industry in which the assessed enterprise operates. It should reflect the conditions of competition in the industry, markets and possible options use of manufactured products; factors affecting the potential volume of production and the dynamics of demand for it.

Briefly about the essence and concept of business

Today, the business life of our society cannot be imagined without the use of the term "business". But relatively recently, in the lexicon of citizens of the socialist countries, this term was used extremely rarely, and even then, as a rule, in a negative connotation. But with the transition of the economy to market mechanisms of regulation and with the restoration of the institution of private property, this word has become increasingly used by our fellow citizens.

Business refers to such types of activities that do not contradict the legislation of the state and are aimed at making a profit by performing any work, providing property or property rights, producing and selling goods and providing services.

This type of occupation refers to various types of industrial, commercial or financial activities.

The emergence of PBU 14/2007 "Accounting for intangible assets" is primarily associated with the introduction of part four of the Civil Code of the Russian Federation, which regulates the rights to the results of intellectual activity and to means of individualization. In this regard, the accounting standards are brought into line with the norms of civil law. The book discusses in detail the methodology of accounting in commercial organizations objects intellectual property taking into account RAS 14/2007 "Accounting for intangible assets". Contains the main accounting entries in accordance with the Chart of Accounts for accounting of the financial and economic activities of organizations and methodological recommendations for accounting for intangible assets. Presented a large number of numerical examples that clearly show the accounting methodology for intangible assets in commercial organizations. Much attention is paid to the provisions of the Tax and...

The purpose of this book is to introduce the reader to practical techniques and methods for valuing intangible assets. Currently, there is a certain lack of literature on these issues, and therefore there was a need to prepare this publication. In the presented work, in the form of answers to questions, the basics of the theory and practice of assessing the value of intangible assets are stated. In particular, considered legislative framework assessment of the cost of intangible assets, the main approaches and methods of assessment are given, the basics of financial calculations necessary for the assessment of property are disclosed. This work is addressed to appraisers, financiers, heads of organizations, as well as to all those who are interested in property valuation issues. The book can be used for educational process universities, in the preparation of specialists in the field of property valuation.

An important condition for the sustainable long-term growth of any company is investment, and investors need reliable information. Without indicators that reflect the most important components of the company's value, managers cannot make decisions that would most contribute to its economic growth. Existing company valuation methods do not take into account intangible assets. And this is stable client base, trademark and image of the company, its intellectual resources, competencies, knowledge and experience, general moral values and norms, management processes. The authors of Weightless Wealth attempt to put an end to the age-old neglect of intangible assets in accounting. In the new economy, it is not capital or physical resources that determine the value of your company and provide it with competitive advantage. What really gives a company value are the intangible assets - brands, networks, competencies, knowledge, skills, corporate...

This book is the first comprehensive scientific basis a study examining the nature and impact of intangible assets. The book provides an assessment of the importance of intangible assets as a condition for the successful operation of corporations, economic growth and public well-being in general. Combining case-based analysis and real-life examples with contemporary economic theory, Baruch Lev sheds new light on the nature of one of the fundamental, yet one of the least understood, drivers of business performance and economic growth. . The target audience of this publication is practicing business appraisers and top managers of companies.

The Financial Valuation Applications and Models (FV) book series is a comprehensive, comprehensive text on business valuation presented in an accessible way. The FV contains numerous examples and methods to assist in the management of valuation projects, as well as quick tips (NB!) that highlight important and often controversial issues in business valuation. For the first time, John Wiley & Sons has been able to engage 30 prominent and highly respected valuation professionals to discuss and agree on appropriate valuation methods, collectively presenting views and positions on valuation concepts, and most importantly, the application of appropriate business valuation methods in practice. The authors are drawn from all over the United States and are members of professional valuation and financial associations including the AICPA, ASA, SFA, IBA, and NACVA. The series of books "Financial Evaluation. Applications and Models" is aimed at groups...

The structure and objects of intellectual property according to the provisions of the Paris Convention and the legislation of Russia, the funds of intangible assets of the enterprise and the methodology for their evaluation are considered. The organization of the use and planning of the effectiveness of intangible assets is disclosed. For university students and students of advanced training courses, managers and specialists of enterprises.

The system-activity concept of intellectual activity is presented in a systematic way. The subject-object essence of innovations is revealed; directions of commercialization of objects of intellectual property are shown; given legal framework governing the ownership of the results of intellectual activity. The classification of intellectual property objects, their features (non-materiality, usefulness, uniqueness, urgency, depreciation, etc.), the possibility of their full participation in market relations are considered. The methodological tools that ensure the involvement of intellectual labor products in economic circulation include the types of value used on the market (market and non-market), approaches, cost principles and technology (process) of evaluation. The textbook has been prepared in accordance with the training program for the discipline DS. 1.3 "Valuation of intangible assets and intellectual property". Designed for students studying...

In the allowance, in accordance with the current regulations, set out primary documents and accounting of intangible assets, fixed assets, capital, material, financial investments(investments) and other non-current assets placed in section 1 of the asset of the balance sheet, as well as the audit methodology. In each chapter, examples are considered and a workshop is given, the solution of which allows you to consolidate the theoretical material. For students of higher and secondary educational institutions studying accounting and auditing, as well as to prepare for the exam for obtaining a qualification certificate professional accountant, auditor and financial manager.

Methodology for the identification and evaluation of "hidden" and "imaginary" assets and liabilities. It is used to assess the market value of an organization (business) The book is an updated and revised edition of two studies previously published by the author: Methods for identifying and evaluating "hidden" assets and Methods for identifying and evaluating "imaginary" assets. The issues of improving the methods and techniques of market valuation of the value of a functioning business using accounting, tax and management accounting, as well as issues of improving methods and techniques for identifying and evaluating assets and liabilities that are either reflected in accounting, but are actually absent, or absent in accounting, but are actually available. The methodology will be of interest to practicing appraisers, as well as teachers, graduate students and students of economic specialties: accounting, entrepreneurial activity, finance and credit, business valuation.

We offer you a translation of the second edition of the "Handbook of Business Valuation". To date, its English-language edition enjoys unconditional authority among valuation business professionals. The authors of the book are recognized authorities in business valuation. The publication presents the practical experience of US specialists in the field of small business valuation in various areas. The target audience of this publication is practicing business appraisers and top managers of companies. The book will be of interest to students of economic specialties and readers interested in modern publications on business valuation. The purpose pursued by the publishers of this book is to expand the reader's understanding of the practical methods of business valuation.

Business valuation is carried out using three approaches: income, comparative and cost. Each approach allows you to emphasize the special characteristics of the object.

The income approach focuses on income as the main factor that determines the value of the object. The greater the income brought by the object of evaluation, the greater the value of its market value, all other things being equal. What matters here is the duration of the period for obtaining a possible income, the degree and type of risks that accompany this process. The income approach is a calculation of the present value of future income that will arise as a result of the use of property and its possible further sale. In this case, the waiting principle applies.

The income approach is usually the most appropriate procedure for business valuation, but it is also advisable to use the comparative and cost approaches. In some cases, the cost and comparative approaches may be more accurate or more efficient. In many cases, each of the three approaches can be used to test cost estimates obtained from other approaches.

Figure 1 presents the main methods for assessing the income approach.

Figure 1 - Income approach methods

According to the income capitalization method, the market value of a business is determined by the formula:

where D is the net income of the business for the year

R - capitalization rate

The discounted cash flow method is based on forecasting these flows from a given business, which are then discounted at a discount rate that matches the investor's required rate of return.

The capital market method is based on the use of market prices for shares of similar companies. The investor, acting on the principle of substitution, can invest either in these companies or in the company being valued. Therefore, data on a company whose shares are freely available, with appropriate adjustments, should serve as a guideline for calculating the company's price. This method used to evaluate minority (non-controlling) shareholdings.

The comparative approach is particularly effective when there is an active market for comparable properties. The accuracy of the valuation depends on the quality of the collected data, since, using this approach, the valuator must collect reliable information about recent sales of comparable properties. This data includes: economic characteristics, time of sale, location, terms of sale and terms of financing. The effectiveness of this approach is reduced if: there were few transactions; the moment of their commission and the moment of evaluation are separated by a long period of time; the market is in an anomalous state because rapid changes in the market lead to distortion of the indicators. The comparative approach is based on the application of the principle of substitution. For comparison, objects competing with the valued business are selected. Usually there are differences between them, so it is necessary to adjust the data accordingly. The amendments are based on the principle of contribution.

The cost approach is most applicable to the valuation of enterprises with heterogeneous assets, including financial ones, and also when the business does not generate a steady income. It is advisable to use the cost approach methods when evaluating special types of business (hotels, motels, etc.), insurance. The information collected includes data on the assets being valued (land prices, building specifications, etc.), data on the level of wages, cost of materials, equipment costs, profits and overheads of builders in the local market, etc. The required information depends on the specifics of the property being assessed. The cost approach is difficult to apply when evaluating unique objects of historical value, aesthetic characteristics, or obsolete objects.

The cost approach is based on the principles of substitution, best and most efficient use, balance, economic value, economic division.

Figure 2 presents the main methods for evaluating the cost approach.

Figure 2 - Methods for assessing the cost approach

cost business economic financial

The three approaches are linked. Each of them involves the use of different types of information obtained in the market. For example, the base for the cost approach is data on current market prices for materials, labor, etc.; for the income approach, discount rates and capitalization ratios, which are also calculated from market data.

Based on the choice of approach, different perspectives open up for the evaluator. Although these approaches are based on data collected from the same market, each of them is associated with a different aspect of the market. On perfect market all approaches should result in the same cost. However, most markets are imperfect, supply and demand are not in balance. Potential users may be misinformed, production may be inefficient. For these and other reasons, different cost indicators can be obtained with these approaches.

The transaction method analyzes the acquisition prices of controlling stakes in similar companies.

The method of industry coefficients allows you to calculate the estimated cost of a business using formulas derived from industry statistics.

The market value of a business is determined by the net asset method as the difference between the sums of the market values of all assets of the enterprise and the values of its liabilities.

The liquidation value method of an enterprise means the calculation of this value as the difference between the total value of the enterprise's assets and the costs of its liquidation.

The main types of value are:

1. Market value. The most probable price at which the object of appraisal can be alienated on the open market in a competitive environment, when the parties to the transaction act reasonably, having all the necessary information, and any extraordinary circumstances are not reflected in the value of the transaction price.

Market value is determined if:

A transaction for the alienation of the appraisal object is supposed, including when determining the redemption price, when the appraisal object is withdrawn in the absence of state regulated prices, or for state needs;

When determining the value of the placed shares of the company, acquired by the company by decision general meeting shareholders or by decision of the board of directors (supervisory board) of the company;

The object of assessment is the object of collateral, including mortgages;

When making non-monetary contributions to the authorized (share) capital, when determining the value of property received free of charge;

When determining the cost valuable papers which either do not circulate at the auctions of trade organizers on the securities market, or circulate at the auctions of trade organizers on the securities market for less than six months;

When deciding on the initial sale price of property in bankruptcy proceedings.

2. Investment cost. The value of a property to a particular investor or class of investors for established investment purposes. This subjective concept relates a specific property to a specific investor, a group of investors or an organization that has certain goals and / or criteria in relation to investment. The investment value of the valuation object may be higher or lower than the market value of this valuation object.

The investment value is determined in the following cases:

If it is supposed to make a transaction with the object of assessment in the presence of a single counterparty;

If the object of assessment is considered as a contribution to the investment project;

When substantiating or analyzing investment projects;

When implementing measures for the reorganization of the enterprise.

3. Liquidation value. The most probable price at which the object of appraisal can be alienated within a period insufficient to attract a sufficient number of potential buyers, or in conditions when the seller is forced to make a transaction for the alienation of property.

The liquidation value is determined when the property of a bankrupt enterprise is sold at an open auction, the property is seized as a result of a trial, or at customs. The liquidation value may be determined in addition to the market value when lending secured by property.

4. Utilization cost. The most probable price at which the object of appraisal can be alienated as a set of elements and materials contained in it if it is impossible to continue its use without additional repair and improvement. Utilization cost is determined at the end of the term beneficial use valuation object, or in the presence of significant damage, if the further use of the valuation object for its intended purpose is impossible.

5. Replacement cost (cost of reproduction and replacement) - the sum of costs in market prices that exist on the date of the assessment, to create an object identical to the object of assessment, using identical materials and technologies, or to create an object similar to the object of assessment, using existing on the date of the assessment of materials and technologies.

The replacement cost is determined by:

When calculating the tax base for income tax, property tax;

For purposes tax accounting when making a fixed asset as a contribution to the authorized capital;

When revaluing fixed assets for accounting purposes;

As part of the cost approach in property valuation.

The replacement cost can be determined when insuring property.

6. Special value - a value that is additional to the market value, which may arise due to physical, functional or economic connection object of property with some other object of property. A special value is an additional cost that may exist more for a buyer with a special interest than for the market as a whole. In particular, a special cost may be calculated in order to determine synergistic effect during the reorganization of the enterprise.

The main cost standards are:

1. The fair market value standard assumes that the valuation of a business or an investment project is made on the basis of information (about property, current and forecast market conditions and purchased resources), which is equally available to any potential buyer and seller of a business, to any investor, whose business opportunities in the field of project financing are also considered equal and unlimited. The fair market value standard is considered too theoretic, but, nevertheless, it is used in world practice (mainly in Anglo-Saxon countries) to determine the taxable base for property tax in terms of financial assets of enterprises that have shares of closed subsidiaries on their balance sheets.

2. The standard of fair value involves the valuation of a business on the basis of information that is equally available to specific buyers and sellers of the business. The information provided must be neutral, the business opportunities of business participants must be the same. The fair value standard is most applicable in Western practice when minority shareholders contest through the courts transactions for the purchase of shares from them by larger shareholders of the same enterprises on the basis of false information about the true market prospects of the enterprise and the true market value of its property. This situation is also typical for Russia, when larger shareholders and managers of privatized enterprises, on the basis of information asymmetry, buy up small blocks of shares from employees of privatized enterprises.

3. The standard of investment value involves the evaluation of a business or an investment project only on the basis of awareness of the property, market prospects of the enterprise in the sales markets, purchased resources, business opportunities (availability of resources for business development, business imagination and creative opportunities) of its particular investor. At the same time, the assessment of the same project will be different for different potential investors. In accordance with this standard, the investment value of an enterprise, from the point of view of an external investor-buyer, is an external value, and from the position of acting managers, it is a balance sheet value.

4. The standard of intrinsic (fundamental) value requires that the valuation of a business or an investment project be carried out by a third-party independent appraiser based on his own knowledge and understanding of the investor's business opportunities. This means that an independent analyst or appraiser, in order to meet the standard of intrinsic (fundamental) value, must have his own experience in the industry of the enterprise in question and his own independent information about it. The standard of internal (fundamental) value also assumes that the analyzed enterprise must be evaluated by all existing business valuation methods in order to obtain a final assessment.

In conclusion, we note that in world practice it is believed that the most objective valuation of a business meets the standard of reasonable market value, since it does not depend on the opinion of the investor who will implement the project.

To the greatest extent, the impact of standards is taken into account when determining the discount rate for forecasting cash flows, as well as project profits and losses. This is due to the fact that commercial and financial information on the level and fluctuation of investment income in the industry under consideration is not always available for different subjects of assessment. If publicly available information is used in the valuation, then it complies with the fair market value standard; if it is confidential, then the valuation is carried out in accordance with the investment value standard.

The role of business (company) PC valuation in the economy

The reasons for the need to assess MS in modern economy, relate:

· The RS valuation allows the seller or the buyer to "put up" the product at the most realistic price, since the RS takes into account not only individual costs and expectations, but also the situation on the market as a whole, market expectations, general economic development trends, and the assessment of this object by the market.

· Knowledge of the market value allows the owner of the object to optimize the production process, if necessary, taking a number of measures aimed at increasing the market value of the object, at maintaining the gap between the individual (internal) and market value in case the latter is exceeded.

· Periodic market valuation improves management efficiency and, consequently, prevents bankruptcy and ruin.

· For the buyer-investor, valuation helps to make the right investment decision.

· Valuation in the macroeconomic aspect is one of the levers of management and regulation of the economy by the state (valuation is of particular importance in the management of state and municipal property).

The value of the company (business) is a characteristic that reflects the efficiency of the company. It depends on a number of factors.

Value Creator- a characteristic of the activity on which the effectiveness of the functioning and development of the enterprise depends.

For the correct definition of value creation factors (VSF), the following principles must be observed:

1) FSS should be directly linked to the creation of value with the necessary detail at all organizational levels,

2) FSS should be set as targets and measured using both financial and operational key performance indicators,

3) FSS should display as achieved on this moment efficiency levels and long-term growth prospects.

Types of value used in business valuation. cost standards.

Depending on the objectives of the assessment, the completeness of the assessed business rights, various types of value can be combined into two groups:

Value in exchange as an expression of exchange value - characterizes the ability of a business object to be exchanged for money or other goods, is of an objective nature and underlies the operations of buying and selling a business, pledging it, including at interest, etc.

Value in use as an expression of use value - due to the usefulness of the business object (the amount of income received) for a certain variant of its use, is subjective, reflecting the existing opportunities for the operation of the object by a specific owner, not related to the purchase and sale of the object and other market transactions.

In world practice, certain concepts of business value have developed and business value standards:

1. Fair market value (standard) is the most likely price that can be obtained for a given enterprise at a given time (in a given economic situation) under typical conditions:

Full awareness of the parties about the state of affairs at the enterprise;

Optimal time of buying and selling;

· The buyer and the seller act without pressure and are not in force majeure circumstances;

The buyer and the seller use the credit conditions prevailing at the time of the sale ( soft loans are not used).

2. If typical conditions are not met, the resulting price is called simply market value .

3. Reasonable cost (standard) – cost of non-controlling interest in the capital of closed joint-stock companies without liquidity discount.

4. Investment cost (standard) - the cost of the enterprise for the implementation of a specific investment project. In this case, the use of this enterprise (for this project) is not always optimal (it's just that at the moment there is no more suitable enterprise for the implementation of the planned project), and therefore the investment value, as a rule, is somewhat higher than the reasonable market value.

5. Intrinsic or fundamental value (standard) - this is an analytical assessment of the value of the enterprise, which is determined not only on the basis of the results of its current activities, but also taking into account:

· Availability, composition and completeness of equipment in technological chains;

· Availability, composition, qualifications and experience of managers and specialists;

· Prospects for the development of the enterprise (profit) as an integral complex.

This is the most realistic and objective assessment of the value of the enterprise. In the stock market, experts distinguish between exchange rate and intrinsic value of shares. The intrinsic (or real) value of shares is determined by the intrinsic (or fundamental) value of the enterprise. It makes sense to buy the shares of this enterprise if the intrinsic value is higher than the exchange rate, and to sell if the prices are inversely related.

6. The value of a going concern is the value of a going concern with equity, inventories, permanent labor intangible assets (patents, goodwill - business reputation, prestige, connections, etc.) and not in danger of bankruptcy.

7. Liquidation value - This net amount, which the owner can receive during the liquidation and sale of assets.

8. Book value - is determined according to the balance sheet as the sum of its assets minus accumulated depreciation, as well as the amounts of short-term and long-term liabilities of the enterprise.

One or another type of enterprise value is determined depending on the formulated purpose of the assessment. In addition, the type of value determines the set of methods by which it can be determined.

The next step after identifying the required cost standard reflecting the objectives of the assessment is the selection of the necessary procedures and methods of assessment.