What a valuation accountant adds to the conversation
Your annual accounts describe financial performance and position under an accounting framework. A valuation asks a different question: what is the business or holding worth for a specified purpose and date? Accounting records are an important input, but a balance sheet total or last year’s profit is not a complete valuation.
A useful engagement connects the records to the commercial reality. That can involve examining maintainable earnings, forecasts, cash requirements, ownership rights and market evidence. The methods and depth of work should fit the company and intended use.
Choose support around the decision ahead
| Your situation | Question to bring | Information that helps |
|---|---|---|
| Preparing to sell | What drives value and what might a buyer challenge? | Current trading, owner roles, customer mix and financing |
| Buying a business | What supports the proposed price and the cash needed after purchase? | Seller information, proposed terms and funding assumptions |
| Changing ownership | Which shares and rights are being valued? | Share structure, relevant agreements and intended date |
| Planning ahead | Which improvements could make the business more transferable? | Forecasts, dependencies and management capacity |
A share scheme, tax matter or third-party requirement can introduce specific instructions. Describe that need before work starts so that suitability, specialist input and the deliverable can be considered.
Questions to ask before choosing an accountant
- Who will lead the work and what qualifications can I verify?
- How will the valuation purpose, date and ownership interest be documented?
- What evidence and methods will be used, and what happens if records are incomplete?
- Will the output explain the assumptions, limitations and route to the conclusion?
- Who may rely on the report, and what follow-up is included?
- How are the fee, timetable, expenses and scope changes agreed?
Do not compare proposals solely by the phrase “full valuation”. Ask each provider to describe the work and output against the same brief. A low initial fee can cover a materially different level of analysis.
Your adviser at Consult EFC
Valuation enquiries are led by Kishen Patel, BFP ACA, ICAEW Chartered Accountant. You can verify his ICAEW membership. I need a Business Valuation is a Consult EFC website for owners seeking clarity on business and share value.
We discuss independence, conflicts, intended users and the information available before agreeing an engagement. A professional qualification does not mean a report is automatically accepted by every buyer, lender or authority; the assignment and intended use still need to be agreed.
What a useful valuation report should let you trace
Imagine handing the report to an intended reader who has not attended the management discussions. Can they identify what was valued, follow the earnings calculation and understand why the selected methods fit the business? That traceability is a useful way to assess the proposed output.
| Part of the report | Question it should answer | Warning sign to clarify |
|---|---|---|
| Purpose and scope | What date, interest and intended use does this cover? | A headline number without a defined subject |
| Financial analysis | How do the accounts connect to the figures used? | Adjustments without a reconciliation or explanation |
| Methods and evidence | Why are the chosen methods and comparisons suitable? | An industry multiple without context or provenance |
| Conclusion and uncertainty | What materially changes the assessment? | Unexplained precision or a guaranteed sale price |
| Use and limitations | Who may rely on the work, and for what? | Assuming every third party can use the same report |
These questions help compare proposals; they are not a claim that one report format suits every assignment. An early planning assessment can be appropriate when its limits are clear. A more complex decision may require a different depth of analysis.
Valuation, brokerage and due diligence have different jobs
A broker may help market a business and negotiate a transaction. A valuation assesses value under an agreed brief. Financial due diligence investigates specified aspects of the financial position and performance to inform a transaction decision. The workstreams can inform one another, but commissioning one does not automatically deliver the others.
Ask who is acting for whom, how they are remunerated and whether any relationships affect the proposed engagement. A fixed fee does not by itself prove independence, just as a professional qualification does not resolve a conflict of interest. Those matters need to be considered explicitly.
For a practical enquiry brief, use this structure: “We are considering [decision], involving [whole company or holding], at [date], for use by [people], with [records available] and a target decision date of [date].” You can discuss that context after making a simple contact enquiry; the public form does not require confidential accounts.
How to get a useful scope and fee discussion
Send your name, email and valuation purpose through the form. An optional business town or postcode helps with context. No confidential accounts are needed for the initial enquiry.
When we speak, explain the business activity, approximate size, ownership interest, relevant date, deadline and proposed users. We can then discuss information requirements, the appropriate output and a fee for the agreed work. See business valuation costs and what to compare in a quote.
Your next-step checklist
- Choose a purpose rather than asking only for a number.
- Specify the whole company or exact shareholding.
- Explain any deadline and proposed third-party use.
- Ask what analysis, report and follow-up the quote includes.
Frequently asked questions
Can my usual accountant value my business?
Possibly, depending on their experience, capacity, independence and the purpose. Ask how the proposed work addresses the specific valuation requirement and who may rely on it.
Is an ICAEW qualification a valuation certificate?
ICAEW membership verifies a professional accountancy qualification. The suitability and status of a particular valuation report depend on its purpose, engagement terms and any specific requirements.
Do you only work with businesses nearby?
We accept remote valuation enquiries from UK businesses. Tell us the business location and any meeting requirements when discussing the scope.
Does a valuation include an audit of my accounts?
Not unless a separate assurance engagement is specifically agreed. A valuation uses and analyses information within its scope; it should explain what work has and has not been performed.
What is the difference between a valuation accountant and a business broker?
Their roles depend on the engagement. Valuation work assesses value for an agreed purpose; brokerage usually concerns marketing and negotiating a sale. Ask about scope, representation and remuneration before comparing proposals.
Professional context and further reading
This page provides general preparation guidance from Consult EFC. Its worked examples are original, hypothetical illustrations, not client outcomes, observed multiples or individual valuation advice.
- ICAEW: business and share valuation — assignment and methods
- IVSC: scope of International Valuation Standards
These resources provide background. Linking them does not imply that every engagement is IVS-compliant or endorsed by ICAEW or IVSC. Any professional assignment requires an agreed purpose, scope and intended use.
Put the question to a qualified adviser.
Tell us the decision, valuation purpose and any deadline. We will discuss suitability, information, scope and fees before work begins.
Discuss my valuation ↗