Define the decision the report will support
Before gathering spreadsheets, write a short description of the requirement. Identify what is being valued, why the valuation is needed, who will use the report and the relevant valuation date. If a transaction is involved, include its proposed structure and the current stage of discussions.
Valuation standards place engagement terms, the basis of value, methods and reporting within a connected framework. A clear brief helps the valuer establish a suitable scope and identify questions that need to be resolved with your finance team or other advisers.
Build an information pack with context
Start with financial statements, recent management accounts, the business plan and the capitalisation table. Add the documents that explain the subject of the engagement: instrument terms for a security, scheme documents for an employee award, or transaction agreements for an acquisition.
An organised pack is more useful than a large unstructured folder. Give each file a clear name and date. Add short notes on unusual income or costs, significant customer changes, new investment plans and differences between historical results and projections. Identify which figures are audited, provisional or forecast.
Make the assumptions discussable
Nominate someone who can explain the financial information and someone who understands the commercial plan. They may be the same person. Be ready to discuss the evidence behind growth expectations, investment needs and other important assumptions, including areas where the outcome remains uncertain.
Raise missing information early. It is more productive to agree how a gap will be addressed than to discover it near the reporting deadline. Keep a record of significant updates so that everyone is working from the same version of the business information.
Agree how the engagement will run
At the outset, discuss scope, intended users, deliverables, responsibilities and the timetable. Include time for information requests and factual clarification. Confirm the arrangements for sharing sensitive documents directly with the appointed team.
A concise initial enquiry is enough to start the conversation. Describe the company, the broad valuation requirement and any relevant deadline. Detailed financial records can follow once the engagement and appropriate sharing arrangements have been agreed.
Further reading
IVSC — International Valuation Standards Overview (opens in a new tab)IVSC — Intended Use, Intended Users and Valuation Purpose (opens in a new tab)This perspective is for general understanding. It is not a valuation opinion or advice for a specific transaction. The appropriate approach depends on the facts, purpose and applicable requirements of each engagement.