The valuing of an asset / business / business unit becomes important when you plan to sell that asset.
When buying or selling an asset (like a company) the price is based on an agreed value between two parties.
It is therefore crucial to determine a reliable and acceptable value of a company to ensure a successful transaction.
The business should be fully aware of the Tax implication on the sale of various assets, as the gain can sometimes be treated as Capital and sometimes as Income.
SARS sometimes deem a transaction to have occurred at Market value, irrespective of the actual agreed price.
We can advise and assist you with all the factors that need to be taken into account.
The following factors are normally taken into account when determining a proper value for the business :
- The cash flow generated by the asset / business.
- The life of the asset / business.
- The growth in the future cash flow.
- The discount rate (riskiness).
- Historical background on the asset / business.
