Normalising of expenses when preparing a Business Valuation for an SMME’s

Small private companies generally have an accounting system that is tax driven. It is important to consider the motivations of the owner, who typically will be driven by cashflow and wealth creation, rather than the reported profit. As a result, the pre-tax profit needs to be carefully considered, as a consequence of the impact of all expenditure. Adjustment should be made to account for any expense items that impact on the result being indicative of the expected trading results.

These commonly include:

Ø Standardising accounting policies for consistency

Ø Elimination of unusual transaction, including private expenditure

Ø Excess or in adequate owners’ remuneration

Ø Funding cost where alternative funding structures are anticipated

Ø Depreciation policy and whether it correctly reflects the asset consumption

We have many years’ experience in professional practice working with SMME’s, as well as valuing them. As such we are well positioned to deal with these adjustments, and to get to the point of a fair valuation as soon as possible, within an appropriate fee.

Valuations will be done in terms of APES225 by a Registered Business Valuation Specialist (CA ANZ). Visit our website for more information.

For more information please contact:

Liza Vogt

liza@bizpro.global

www.bizpro.global

0426178106