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Valuations

Valuation is the process of estimating what something is worth.  
Value creation is key to business success.

However, valuation is often a controversial and complex subject. It requires an in-depth understanding of the market, company, competitor's financial and non-financial information, as well as the respective legal or regulatory environment.

Valuations have many uses including:

  • Investment analysis
  • Capital budgeting
  • Merger and acquisition transactions
  • Financial reporting

The Valuations division is a part of the Corporate Finance practice at Deloitte in South Africa, and provides a range of services to the Private and Public Sectors.

Our valuation methods

Several valuation methods are used to determine the value of a company.

A combination of methods develops mutually supporting evidence towards the valuation conclusion. The generally accepted valuation approaches are the Income approach, Market approach and Cost approach. Each valuation assignment is assessed to ascertain which methodology is most appropriate after considering, amongst others, the sector in which the asset operates and key value drivers of the asset being valued.

Key Service Offerings

  • Indicative and independent valuations
    We perform valuations of business enterprises and equity instruments for, inter alia, transactions, disputes and to assist management in making decisions.

  • Fairness opinions and Fair and reasonable opinions
    We specialise in providing independent opinions which are required in terms of the JSE (related party transactions and share issues at a discount) and Takeover Regulation Panel rules.

  • SARB letters
    We provide limited assurance valuation reporting for South African Reserve Bank purposes where transactions involve non-residents.

  • Profit forecast reviews
    We review profit forecasts required to meet JSE Listings Requirements (field work performed by Valuations and signed off by audit partner).

  • Going concern reviews
    We review cash flow forecasts in order to test the going concern assumption for financial reporting purposes.

  • Impairment testing
    We perform and review valuations for the purposes of determining the recoverable amount of assets for impairment testing in terms of IAS 36.

  • Pre and post-acquisition purchase price allocation valuations and intangible asset valuations
    We value intangible assets for financial reporting purposes (International Financial Reporting Standard (IFRS) 3), relating to an acquisition. We also perform independent reviews of purchase price allocation valuations.

  • Solvency and liquidity reviews
    We perform and review valuations for the purposes of determining the recoverable amount of assets for impairment testing in terms of IAS 36.

  • Working capital reviews
    We review working capital forecasts required to meet JSE listings requirements.

  • Tangible asset valuations
    We perform and review valuations of property, plant and equipment for fair value purposes and in line with the requirements of IAS 16.

Key contact


Charles Larbi-Odam
Partner
Tel: +27 (0) 11 806 5267
Email: clarbiodam@deloitte.co.za


David McDuff
Partner
Tel: +27 (0) 11 806 5617
Email: dmcduff@deloitte.co.za

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