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Venture capital and private equity managers are often required to measure the fair values of investments in the funds as part of the reporting process to investors. The International Private Equity and Venture Capital (“IPEV”) Guidelines is a well-recognized valuation guideline that set out a globally-acceptable framework for fair value measurement that is in compliance with both IFRS and US GAAP. With our knowledge on IPEV Guidelines and professional finance and accounting expertise, we are capable to assist management in carrying out the valuations in accordance with the reporting standards and make better economic decisions.

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Venture Capital and Private Equity Portfolio Valuation

For most of the transactions nowadays, cash is no longer the only item to be paid as consideration. It is becoming more popular to structure a transaction with the involvement of various types of financial instruments, such as Convertible Bonds and Notes, Preference Shares, Warrants, Forwards, Call and Put Options, Embedded Derivatives, etc. Hence, an independent financial instruments valuation may be required for financial reporting of both public and private companies, according to relevant accounting standards such as HKFRS/IFRS 2 and US GAAP ASC 718 and HKFRS/IFRS 9 and US GAAP ASC 326.
 
The structures of financial instruments are getting more complex with the various clauses embedded in the terms and agreements. Based on our knowledge on different valuation methodologies and our prior experiences, AVISTA can customize the most appropriate valuation model to capture the terms and clauses of the particular instruments precisely. In addition to the widely adopted binomial model and Black-Scholes model, trinomial model and Monte-Carlo model may sometimes be an alternative in financial instruments valuation.

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Financial Instruments Valuation

The value of a company’s asset, both tangible and intangible, could be impacted by external economic conditions and volatile financial markets. As a result, companies are required to measure and report the corresponding losses arisen from impaired assets according to relevant accounting standard such as HKAS/IAS 36 and US GAAP ASC 350. AVISTA offers valuation and accounting expertise to conduct impairment testing on goodwill, tangible assets and definite/indefinite-lived intangible assets.

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Goodwill and Assets Impairment Assessment

In every merger and acquisition transaction, acquirers are often required to measure the fair values of the tangible and intangible assets as of the completion date of transaction in accordance with relevant accounting standards such as HKFRS/IFRS 3(R) and US GAAP ASC 805. Commonly identifiable intangible assets include Trademark and Brand Name, Customer Relationship, Technology, In-progress R&amp;D, Patent, Intellectual Property, Copyright, Franchise Agreement, Favorable Lease, Non-compete Agreement, etc.
 
Our finance and accounting expertise, together with our extensive industry knowledge and practical valuation skills, is capable of performing such valuations for financial reporting or internal reference purposes.

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Purchase Price Allocation (PPA) Valuation

Companies may adopt various forms of share-based payments, such as Employee Stock Options, Restricted Stock Units, Stock Appreciation Rights, etc., as a form of incentives nowadays. AVISTA is capable to assist companies in meeting the requirements of relevant accounting standards such as HKFRS/IFRS 2 and  US GAAP ASC 718  in relation to share-based payment transactions to ensure that the impact of these transactions is correctly reflected in financial statements. Even more, AVISTA can also perform scenario analysis to assist companies in assessing the impacts of these share-based payments on the financial statements in advance for determining the appropriate structures, terms and vesting conditions that could meet your financial budget.

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Share-Based Payment Valuation

AVISTA provides various types of professional Business Valuation Services to our clients, which suits different purposes of the companies, including M&amp;A transactions, Financial Reporting, Stock Exchange Listing Rules Compliance, Tax Planning and Internal Reference.

Business Valuation Services in Hong Kong and Mainland China