Valuation for IFRS purposes
Valuation for IFRS purposes ensures the accuracy, transparency, and comparability of financial statements in compliance with the global standards.
There are a number of mandatory cases when a consultant is engaged for valuation: PPA – purchase price allocation, impairment test (testing assets for impairment), fair value and liquidation value assessments of assets and other tasks supporting IFRS-compliant financial reporting.
This process provides investors, creditors, and other stakeholders with reliable insights into a company’s financial position and performance, facilitates informed decision-making and enhances the company’s credibility at the international level.
Valuation for IFRS purposes includes the following stages:
- Defining valuation purpose. The first stage involves setting the valuation’s objective. It may include initial IFRS adoption, impairment testing, PPA, liquidation value determination, and other reporting needs.
- Identifying valued assets and liabilities. It is determined which assets and liabilities are to be valued. These may include property, plant and equipment, intangible assets, financial instruments, inventories, liabilities, etc.
- Data collection. For valuation purposes, all relevant data should be collected, including market prices, financial metrics, asset and liability specifications, as well as data on current and future cash flows.
- Data analysis and verification. Once the data has been collected, it is to undergo the process of validation for accuracy and completeness. This may include reviewing market prices, recalculating cash flows and some other analytical procedures.
- Conducting valuation. The stage directly involves valuation of assets and liabilities with the help of the selected methodologies.
- Review and verification. Valuations must be verified and validated before they can be included into financial statements.
- Incorporation of valuation results into financial statements. Valuation outcomes are included in the financial statements in accordance with the IFRS requirements.
- Disclosures. IFRS Accounting Standards require disclosure of information about valuation methods, applied assumptions, key sources of uncertainty and sensitivity of the estimates to the change in conditions. This preconditions transparency of financial statements and understanding by clients.
Upon valuation completion, the client receives:
- IFRS-compliant valuation report adhering to professional standards.
- Support for accurate and transparent financial reporting.
- Data for creditworthiness assessments often required by banks and other creditors, as well as international investors.
- Insights for post-M&A asset consolidation.
- Benchmarking against global peers.
Our advantages
Expert Team
FBK valuers have 20+ years of experience, are well-versed in international and Russian valuation standards, and possess deep industry expertise.
Solid Reputation
According to the 2024 results, FBK rose two spots to rank second in the RAEX audit firm ranking for valuation revenue.
Flexible Work Format
FBK provides full support in aligning valuation results with auditors, thus minimising client workload.
Key Persons
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