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A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Level 3 fair values, goodwill impairment tests, purchase price allocations and exploration asset reviews for Illawarra entities reporting under Australian Accounting Standards, with every input sourced so the audit team can retrace each step.
Indicative valuations from A$799. Certified Summary and Detailed reports from seven business days.
A financial reporting valuation supports an estimate in the accounts, as opposed to a recorded transaction, and hands the auditor evidence to test under ASA 540. Illawarra entities most often need AASB 13 fair values for unlisted holdings, AASB 136 impairment tests, AASB 3 purchase price allocations and AASB 2 values for staff awards.
Accounts blend records with estimates. The worth of an unlisted stake, the support for goodwill booked on an acquisition, the intangibles actually bought in a deal, the cost of options given to staff and whether a tenement still justifies its carrying amount are all estimates, and each rests on a valuation. ASA 540 requires the auditor to test every one of them, and for a finance team on Crown Street or an audit committee in Wollongong CBD that scrutiny grows each year.
A poor estimate does more damage than an uncomfortable audit. A fund carrying its stake in a university spin-out at a stale, generous value reports gains it has not earned and may collect fees on them. An impairment booked a year late inflates profit until it lands, and then can breach a lending covenant. An Unanderra engineering business acquired with the whole premium sitting in goodwill, rather than divided among customer contracts, the brand and the technology, carries the wrong amortisation and the wrong impairment base for years.
Illawarra reporting entities give these questions a local flavour. Engineering and fabrication suppliers around Port Kembla and Unanderra, serving the steel and heavy industry supply chain, grow by acquisition and end up with purchase price allocations and goodwill to defend, and their forecasts lean on contract revenue that arrives in lumps. Hospitality groups with venues in Wollongong, Shellharbour and Kiama, health providers working alongside the Wollongong and Shellharbour hospitals, a university-linked spin-out and not-for-profit boards reporting to the ACNC all meet the same expectation for a Level 3 estimate. Resources and exploration companies run from a Wollongong office carry assets that AASB 6 tests against its own indicators, and ASIC's financial reporting surveillance has repeatedly listed impairment and the values of unlisted assets among its areas of focus.
Our clients are CFOs, audit committees, fund managers and the auditors who review their work, and each engagement is built around the questions the audit team is going to ask. If a valuation cannot survive that conversation, it has not done its job.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Almost every reporting valuation starts from one of four standards. Each asks its own question, measures on its own basis and is audited its own way, and a resources company has a fifth question under AASB 6.
Goodwill and indefinite-life intangibles are tested annually; other assets are tested when an indicator appears, and a market capitalisation below net assets is one such indicator. The carrying amount of each cash-generating unit is compared with its recoverable amount, the higher of value in use and fair value less costs of disposal. Value in use draws on board-approved forecasts, normally covering no more than five years, for the assets as they stand today, discounted at a pre-tax rate.
Fair value is an exit price: what a market participant would pay for an asset, or require to take on a liability, in an orderly transaction on the measurement date. Inputs are ranked in three levels, and most private company holdings land in Level 3, where the entity's own assumptions drive the answer and the disclosure load is heaviest. A recent arm's length round makes a good anchor, but it must be calibrated and rolled forward at each reporting date, not simply repeated.
When a deal completes, the consideration is spread across identifiable assets and liabilities at fair value, including intangibles the target never recorded: customer relationships, brands, technology, the order book and restraint covenants. Goodwill is the remainder. Contingent consideration such as an earn-out is recognised at acquisition-date fair value and, if classed as a liability, is remeasured through profit or loss until settled.
Options and performance rights granted to employees are measured at grant-date fair value with an option pricing model and expensed across the vesting period. How that accounting number differs from the employee's Division 83A tax value, and why the gap matters to a Wollongong growth company, is explained on our employee share scheme page.
Exploration and evaluation assets carry their own impairment triggers. AASB 6 points to an exploration right that has expired or is about to with no renewal expected, substantive further spending that is neither budgeted nor planned, a decision to stop work in an area after finding nothing commercially viable, and data indicating the carrying amount is unlikely to be recovered through development or sale. Where a trigger exists, AASB 136 measures the asset at a level no larger than an operating segment. Where no reliable cash flow forecast exists yet, the valuation tends to rely on transactions in comparable tenements, and the term and renewal history of each exploration licence belongs in the evidence file.
For AASB 13 fair values we first value the whole enterprise, using the market approach with multiples from listed peers and comparable transactions and the income approach through a discounted cash flow, as far as the company's stage and data permit. The enterprise value is then allocated across share classes through a waterfall, an option pricing method or a backsolve to the latest round. If the fund invested recently, the model is calibrated to return that price at that date, and later inputs change only for what has moved since: trading against plan, peer multiples and milestones. Debt holdings are valued on yield against current rates for similar risk and cross-checked against enterprise value cover, and a convertible note may need to be split under AASB 9 into a host debt and an embedded derivative remeasured each period.
Impairment work begins before any modelling, with how cash-generating units are drawn and goodwill is allocated, since a unit drawn too broadly lets a healthy business shelter a failing one and auditors look for that first. Value in use then follows the standard: cash flows for the assets in their present state, excluding expansion capital and uncommitted restructuring, a terminal growth rate supported by long-run evidence, and a pre-tax discount rate found by iteration from a market-based post-tax weighted average cost of capital, not grossed up. For a Port Kembla or Unanderra engineering supplier with lumpy contract revenue, we test the forecast against the contracted order book and the tenders the board has actually approved. Where value in use sits close to the carrying amount we also estimate fair value less costs of disposal on market participant assumptions, because recoverable amount is the higher of the two, and testing only one can produce a write-down that should never have been booked.
For a purchase price allocation, each intangible is identified and valued by a method suited to it: multi-period excess earnings for customer relationships, relief from royalty for brands and technology, a with-and-without comparison for restraint covenants and replacement cost for an assembled workforce as a contributory asset. A hospitality brand bought with a group of Kiama or Shellharbour venues is a typical relief from royalty case. Implied returns on each asset are reconciled to the return on the deal as a whole, which is the check an auditor applies. That work then feeds the first impairment test and tax cost setting, and the sensitivity and headroom tables are laid out as the notes require, so they transfer directly into the disclosures.
Findings like these push a routine audit toward a modified opinion, a restatement or correspondence with ASIC.
These valuations are written for an auditor, and sometimes for a regulator reviewing the auditor, so nearly all are certified. Planning is the exception: a board wanting to know whether a write-down is coming, or how a proposed acquisition would reshape the balance sheet, before it commits.
The report follows the order in which an auditor works: the accounting question, the unit of account, the measurement date, the information used, the method and the reason it was chosen, each input with its source and date, the calculation, the sensitivities and the disclosure schedule. Every judgement is explained in plain language where it is made, so a reviewer at the audit firm can follow it without rebuilding the model.
A certified valuer signs each report, answers the auditor's questions directly, takes the audit committee through the sensitivities and defends the conclusion if challenged. If a reported value becomes part of a commercial dispute, the same valuer can give expert evidence under the Expert Witness Code of Conduct in the court rules, whether in the Supreme Court of New South Wales in Sydney or another court. We plan around your close timetable and work with the finance team and the auditor from the start, because a valuation that turns up after the accounts are signed is an argument, not evidence.
If the auditor rejects one assumption, how far does the conclusion move, and do we already know? A valuation with no ready answer has not been stress-tested.
Talk your situation through with a certified valuer before you commit to anything, at no cost.