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Forensic Accounting & Company Valuation

What would you charge?

Afternoon all,

I am due to meet with a client who requires a company valuation in relation to a shareholder dispute - t/o is around £2m - it appears fairly straightforward but I have no idea what to charge - any "ball park" ideas? Thanks!

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By DJKL
17th Feb 2017 15:46

Maybe a little more re the instruction would assist:

In what capacity are you acting, is your valuation intended to be merely indicative, solely for one party, or is your appointment part of a formal legal process?

Do you know the parameters of your instruction etc?

I think turnover is really not a benchmark re quantum of work and costs, the business might be in a very niche activity where obtaining third party valuation comparatives might be really difficult or it might be say a CTN, Pub or professional services firm (though they have their difficulties re client loyalties) where market information is much more plentiful.

To tell you the truth, and with no disrespect intended, if you need a steer re scope of work and its costs/ your charge re same, is business valuation something you ought to undertake?

It is certainly not an area I would plunge into without far more recent experience- whilst I may value projects/ activities as part of my day job I do not have a client paying an express fee for the service who can sue me if I screw up.

Just a thought.

Thanks (1)
17th Feb 2017 16:02

Is this for the court - as an expert - or is it just to advise the client?

Thanks (0)
20th Feb 2017 12:53

Because of a conflict of interest just put out a valuation to another accountant for a quote on the value of the company shares. Quote of £750 plus VAT was accepted by the directors.

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20th Feb 2017 14:39

I have a contact that specialises in these.
He charges £250 an hour.
PM me if you want me to put you in touch

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to Discountants
20th Feb 2017 22:30

He won't get any work if he charges by the hour. That approach went out with the ark. Instructing solicitors and the judges will laugh at him.

We can't really help the OP until he answers my question about what his client is asking him for.

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21st Feb 2017 11:38

I'm not sure I agree with johngroganjga: hourly charges are still the common currency of most professionals, accountants and lawyers (including BDO !).
However, I agree with him and DJKL's posting that more information is required. I would add that some research will be necessary to give a reasoned valuation.
Having said that paulgrca.net is in the right ball park, and I estimate that the fee could be between £750 and £1,000, but any follow-up will be extra.
Good luck!

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By DJKL
to Jack the Lad
21st Feb 2017 14:48

Whilst I do not myself do valuations I possibly suspect John's comment re fixed fees may arise as valuation work can likely be , " how long is a piece of string?"

I

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21st Feb 2017 14:28

It never ceases to amaze me that people come onto this site to seek advice and, when it's given, they make no further comment or offer thanks for the advice or provide further detail if requested.

I do, however, agree with DJKL's comment: if you don't know how to charge for this service, it suggests that you haven't provided valuation advice before (or not recently). If that is true, I would recommend getting a specialist to undertake this work (either as a direct referral to the client or sub-contract the work). You cannot possibly value a business and provide justification for that valuation if this is not part of your regular skill-set.

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21st Feb 2017 17:44

I agree with DJKL's comments.

I'm struggling though with the suggested fee for this work.

The questioner is dealing with a shareholder dispute matter which will inevitably result in the need for the valuation to be justified, possibly in court. I can't see how a comprehensive valuation report can be prepared in that knowledge for the fee range suggested.

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