What is the primary measure used for asset valuation (is it historic cost convention ?) on the statement of financial position ?
Also, what are the two exceptions to the usual method of asset valuation on the statement of financial position ?

Hi Adrian
What sort of assets are you talking about? business assets, depreciating assets?
Happy to help if I can.
Regards
Chris.

Hey Chris !
I'm talking about the business assets.

Appreciate it, Adrian.

Dear Adrian, if I understand you question correctly there are a number of “methods” used for asset/business valuation. It is really dependent on three key aspects,

1 being the advisors typical approach to selling and therefore valuing an asset using industry benchmarks and multiples
2 the standard accounting approach using an EBIT(DA) formula -revenue margin and profit
3 Who is acquiring the asset, as I have seen in the case of a client of mine, being approached by 2 parties in the same sector with a different requirement for the asset so there valuation approach was different

All are relevant and applicable. However, if you take a considered and staged approach to a valuation assuming an eventual sale, there are other components that can impact on the asset value like (IP, Systems, reliance on key people, liabilities etc) that can have either an uplift or discount applied, depending on what is an isn’t in place in a business.

I hope this helps?

Regards
Chris

Hey Chris !
Thanks for your reply mate. Yes, your information absolutely helps. Even cleared up some extra parts.

Thanks for the time & response.

Have a nice day, Adrian.

My pleasure Adrian, glad to assist.

Regards,
Chris