The taxation of business income and shareholder income in the objective business valuation is complex. Taxes at company and shareholder level must always be taken into account.

In the context of a business valuation using the DCF method or the discounted earnings method, the discount rate is used to assign a present value to future income or cash flows.

Determining an objectified business valuation in accordance with IDW S1 poses challenges for business valuers

In 2015, the Technical Committee for Business Valuation and Business Administration (FAUB) adopted the draft of the IDW Standard:

The determination of the capitalization rate on the basis of the weighted average cost of capital (WACC) is a central requirement of the IDW. This requires, among other things, the determination of the riskfree base rate for a (quasi-)risk-free capital market investment.

The valuation of freelance practices such as medical practices, architectural firms or law firms remains insufficiently defined in common standards such as IDW S1 or IFRS.

The cash flow of the "perpetual annuity" is considered an extremely value-sensitive parameter in the DCF valuation. Among other things, it is determined by the level of long-term investments.

On the stock market, valuation methods based on multiples have always been among the most frequently used methods in business valuation. Particularly in the English-speaking world,

The perpetual annuity is based on assumptions of constant growth and a constant discount rate and is used in business valuation in both the Income approach and the DCF (discounted cash flow) method.

Start-ups are generally subject to revaluation more often than conventional companies. Every injection of fresh equity as part of a capital increase leads to an implicit new valuation of the company.

Find out about the key differences in business valuation for family and inheritance law matters in accordance with IDW Standard 13.

Consistent application of the multiples method is crucial for meaningful results. This article highlights the most important aspects of methodology and parameters.

IFRS 16 sets out the requirements for the recognition, measurement, presentation and disclosure of leases in the annual financial statements of companies that prepare their accounts in accordance with International Financial Reporting Standards (IFRS).

The topic of "deferred taxes" is rarely one of the typical finance professional's favorite topics in day-to-day accounting practice. It is therefore not surprising that the issue is ignored by valuers in the course of business valuations. When it is nevertheless worth taking a look at the topic.

Find out why the assessment of liquidity required for operations is often misunderstood in business valuation.

The valuation of small and medium-sized enterprises (SMEs) presents experts with a complex problem. Can multiple valuations replace the DCF and Income approach? In this article, we shed light on the challenges and possible solutions when valuing SMEs.

Find out how you can use the beta factors based on a listed peer group for business valuation.

Multiples are often used in business valuations to check plausibility, especially in a capital market-oriented environment, where they often serve as the main valuation method. However, not everyone realizes that gearing also plays a role in multiples valuation, similar to the determination of beta factors.

In the world of business valuation, the sustainable growth rate plays a crucial role. This article provides valuable insights into the factors that influence this rate and explains how valuation experts can determine it.

Find out how an impairment test is carried out, what the IFRS requirements are and which errors can be avoided.

According to the Federal Court of Justice, external liabilities are to be taken into account in the capitalized earnings value method by deducting the interest on borrowed capital attributable to them.

In valuation practice, multiple valuations are often used for SMEs, particularly with Sales, EBITDA, EBIT and EBIT multiples. But can they replace the common DCF and Income approaches? The IDW says so:

A key feature of company valuation in family and inheritance law is that in most cases it involves a property dispute between natural persons. As a result, in addition to company shares, other assets of natural persons must regularly be taken into account.

The bid-ask spread has far-reaching effects on business valuation. Precise and valid values are of central importance for auditors and accounting managers in corporate groups. This is because they form the basis for numerous decisions, from accounting to strategic acquisitions. An often overlooked but crucial factor in this context is the bid-ask spread. In this article, we show how closely bid-ask spread and beta factors are linked.

Brand valuation plays an important role in determining purchase prices as part of business valuation. After all, brands are intangible assets that have a significant impact on the value of a company. But how can the value of a brand be validly determined? And how challenging is brand valuation? This article provides answers for companies and investors.

The country risk premium is a factor that plays an important role in business valuations and investment decisions. It represents the additional risk associated with investments in certain countries. Because the country risk premium influences the cost of capital, it has a direct impact on the value of the company. We show how to determine the country risk premium and what practical relevance it has for the day-to-day work of companies.

The equity risk premium is an important key figure in the field of business valuation. It is used to calculate the additional return that an investor requires for assuming market risks. But how can this premium be reliably determined and what impact does it have on the valuation results? In this article, we address these questions and show why the equity risk premium is of central importance for auditors or heads of accounting at corporate groups.

Company share prices are subject to constant fluctuations on the financial markets. A decisive factor for the volatility of a share is the so-called beta factor. It indicates how strongly a company share reacts to general market developments. Understanding the beta factors is essential for an accurate business valuation. This is because it provides valuable information on the risk of an investment. In this article, we shed light on the relationship between the beta factors and the liquidity of a share. We explain how the two factors influence each other and what practical implications this has in practice.

The financial markets are a complex environment in which companies constantly fluctuate. But why do some sectors react more strongly to general market developments than others? The answer lies, among other things, in the so-called sector betas. Understanding sector betas is essential for auditors and tax consultants. This is because they provide valuable information on the risk of companies and play a decisive role in business valuation. In this article, we explain what sector betas are, how they are calculated and how they are used in day-to-day work.

IFRS 13 is of great importance in the context of the measurement of intangible assets. For auditors and group accounting managers in particular, precise knowledge of valuation techniques and valuation inputs is essential to ensure correct and transparent accounting. This article highlights the key aspects of IFRS 13 and shows why an accurate valuation of intangible assets is not only a legal requirement, but also a decisive factor for business valuation and the capital markets.

Goodwill is often misunderstood. What exactly is behind this intangible asset on the balance sheet? And why is the goodwill impairment test so closely related to business valuation?

The beta factor, a cornerstone in financial analysis, is paramount in valuing companies and calculating their cost of capital. However, beta is not a monolithic concept. A spectrum of variants exists, each tailored to specific applications and calculation methodologies. The selection of the appropriate beta factor is pivotal to the accuracy of valuation outcomes and, consequently, the quality of advisory services. A comprehensive understanding of beta variants is indispensable for auditors and valuation experts. We illuminate the most significant beta factors and elucidate their optimal applications.

The Svensson method is a valuable resource for professionals involved in group financing and valuation. As a well-established approach to estimating the yield curve, it plays a crucial role in asset valuation and the design of financial instruments. In this article, we will delve into the mechanics of the Svensson method and explore the benefits it provides.

Purchase price allocation is a cornerstone of any company acquisition within a corporate group. Its ramifications extend deeply into both accounting and future financial reporting. In valuation practices, meticulous and standard-compliant implementation of purchase price allocation is paramount. This ensures accurate representation of acquired assets and mitigates potential risks in subsequent valuations. This article delves into all pivotal aspects of purchase price allocation during initial consolidation following a company acquisition. It underscores the requirements of IFRS and German GAAP for purchase price allocation and elucidates the distinctions in their application. Additionally, it offers practical guidance for implementation.

Brands are among the most valuable assets of many companies. The value of the Apple brand alone exceeded the trillion-dollar mark in 2024, highlighting the significance of intangible asset valuation in business valuations and purchase price allocation. Various methods play a role here, including the relief-from-royalty method. The relief-from-royalty method provides a structured approach to valuing intangible assets, enhancing transparency in accounting. We will outline the basic concept, explain the necessary steps for implementation, and assess its suitability for application under IFRS and tax law.

The market risk premium (MRP) is a central component of company valuation and plays a significant role in the capital asset pricing model (CAPM). It measures the additional return investors expect for assuming market risk compared to risk-free investments. One way to calculate the market risk premium is to employ the dividend discount model (DDM), also known as the Gordon growth model. This is one of the implicit methods for determining the MRP. Unlike historical methods, which evaluate past return data, the model estimates the market return by discounting future dividends.