Financial Instruments 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 valuation on such items 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.

Our Experience

Through years of experience, we understand the difficulties and the problems faced by corporate, enabling us to provide industry-specific solutions.

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