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A certified valuer will listen to your situation and answer any questions you may have, at no cost.
When a number in your accounts is a judgement rather than a transaction, the auditor needs evidence it can test. We value cash-generating units, unlisted holdings, acquired intangibles and exploration assets for reporting entities across Newcastle and the Hunter, and hand over a file built for ASA 540 review.
Indicative valuations from A$799. Certified Summary and Detailed reports from seven business days.
For Newcastle and Hunter reporting entities, a financial reporting valuation is the evidence behind an estimate the auditor must test under ASA 540. The most common are impairment tests for mining services, port and manufacturing businesses facing the energy transition, Level 3 fair values for unlisted stakes and the allocation of an acquisition price across intangibles.
Most of a balance sheet is history; a few lines are opinions. Whether goodwill from an acquisition is still supported, what an unlisted stake would sell for, which intangibles a deal really bought, what staff options cost and whether an exploration asset still earns its carrying amount are all estimates resting on a valuation. ASA 540 requires the auditor to test each one, and audit teams now expect to see the working, not just the answer.
The consequences reach past the audit file. A write-down that should have been taken last year makes this year's result look worse and can collide with a bank covenant. A fund holding a stake in a University of Newcastle spin-out at an out-of-date valuation reports gains that do not exist, and an engineering business at Tomago bought with the entire premium left in goodwill, rather than spread over its customer contracts, trading name and know-how, carries the wrong amortisation and an unreliable impairment base for years.
The Hunter gives these questions their own shape. Mining services and engineering businesses whose customers are coal producers in the Upper Hunter have to show that long-range forecasts reflect the region's energy transition, and the same question reaches logistics and bulk handling businesses tied to throughput at the Port of Newcastle. Defence suppliers around Williamtown and manufacturers at Beresfield often grow by acquisition and must then support the purchase price allocations and goodwill that follow, while health research businesses, private capital managers and not-for-profit boards reporting to the ACNC face the same standard for Level 3 estimates.
We work for CFOs, audit committees, fund managers and, at times, the auditors themselves, and we scope each engagement around what the audit team will ask. The test of the work is whether it holds up in that discussion.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Almost every reporting valuation answers a question set by one of four standards, and each one measures on its own basis and is audited in its own way. A resources group adds a fifth, AASB 6.
Fair value under AASB 13 is the price a market participant would pay for the asset in an orderly sale on the measurement date. Shares in a private company almost always fall into Level 3 of the hierarchy, where unobservable assumptions drive the answer and the disclosure load is heaviest. The last arm's length round helps, but only as a calibration point that is updated at every reporting date.
The test compares what a cash-generating unit is carried at with what it can recover, being the greater of value in use and fair value less costs of disposal. Goodwill and indefinite-life intangibles are tested annually; other assets only when there is an indicator, such as a lasting adverse change in the market a business serves. Value in use draws on board-approved projections, ordinarily covering up to five years, for the assets in their existing condition, discounted at a pre-tax rate.
The acquirer recognises each identifiable asset and liability of the business it bought at fair value on completion, even intangibles the seller never recorded: customer contracts and relationships, trade names, technology, the order book and restraints. Whatever part of the price is left over is goodwill. An earn-out counts as part of the price at its fair value on day one and, if it is a liability, is remeasured through profit or loss until paid.
Staff options and rights are expensed over the vesting period at a fair value fixed on the grant date, using an option pricing model suited to their terms. That figure is not the one the ATO uses to tax the employee; our employee share scheme page explains the difference and why it matters for a Hunter company issuing equity to staff.
Exploration assets sit outside the annual testing cycle and are reviewed only when one of AASB 6's triggers appears: a licence that has lapsed or will soon lapse with renewal unlikely, no budget or plan for further substantive spending, a decision to stop work in an area after finding nothing commercial, or evidence that development or sale will not recover the carrying amount. A trigger moves the asset into an AASB 136 test, at a level no larger than an operating segment. Since a dependable forecast rarely exists at that stage, prices for comparable tenements usually carry the valuation, and each licence's history belongs in the evidence file.
An unlisted holding is valued from the top down. We estimate what the whole business is worth through the market approach (listed peer multiples and comparable deals) and, where forecasts are credible, the income approach, then work out what the holder's class of security is entitled to through a waterfall, an option pricing method or a backsolve. A recent investment anchors the model at that date, and later movements are explained input by input. Loans and notes are valued by comparing their yield with current market rates for similar risk, and a convertible note may need its debt and conversion feature separated under AASB 9.
For impairment, the first question is structure: which assets make up each cash-generating unit and where goodwill sits, because a unit drawn too broadly lets a strong business mask a weak one. Value in use then keeps within the standard's limits, with cash flows for the assets as they stand, no uncommitted restructuring or expansion, and a pre-tax rate derived by iteration from market evidence. For a business whose customers mine or ship coal, the forecast horizon and terminal value are tested against a realistic view of how long that demand lasts. Where headroom is thin, we add a fair value less costs of disposal estimate, because recoverable amount takes the higher of the two.
After an acquisition, we identify what the buyer really paid for and value each intangible with the method that suits it. Long-term service contracts with mining houses or customers at the Port of Newcastle usually call for multi-period excess earnings, a trading name or proprietary technology for relief from royalty, and restraints for a with-and-without comparison, while the assembled workforce is costed as a contributory asset rather than recognised. The implied return on each asset is reconciled to the return on the deal as a whole, and the allocation then feeds the first impairment test, tax cost setting and the disclosure notes.
Each of these can turn a routine year-end into a qualified audit opinion, a restated comparative or an inquiry from ASIC.
Because the reader is an auditor, and sometimes ASIC looking over the auditor's work, nearly every engagement ends in a certified report. An Indicative valuation is useful earlier, when a board wants an internal read on headroom, or on how an acquisition would change the balance sheet, before the reporting date.
We lay the report out the way an audit file is reviewed. It moves from the accounting question and the unit of account to the measurement date and the sources used, then to the method and the reasons for it, the inputs with their dates, the calculation, the sensitivities and the disclosure schedule. Judgements are explained in plain words where they occur, so a reviewer can follow them without rebuilding the model.
The valuer who signs the report is the one who meets your auditor, explains the sensitivities to the audit committee and defends the work if it is questioned. If a reported value later becomes evidence in a commercial dispute before the Supreme Court of New South Wales in Sydney, that certified valuer can give expert evidence under the court's expert evidence rules and the Expert Witness Code of Conduct. We schedule the work backwards from your reporting deadline and bring the auditor in early, since evidence produced after sign-off can only start an argument.
If the auditor rejects one key assumption, how far does the answer move, and does the file already show it? If nobody can say on the spot, the valuation has not been stress-tested.
Talk your situation through with a certified valuer before you commit to anything, at no cost.