IFRS (international financial reporting standards) were set up to unify financial reporting of cooperating companies from various countries of the world. Actually, it is an international business language. The reports composed in line with the IFRS reporting standards insure the companies’ access to the international market and facilitates their interaction with foreign investors and shareholders.
Valuation of the company assets is a very important step to the company’s transition to IFRS for several reasons:
• According to IFRS the fair value of assets should be reflected. The real value of the company’s assets is one of the main conditions of its transparence for shareholders and investors;
• in the majority of cases, to determine a fair value of asset, one needs to refer to an independent valuer. Valuation for IFRS purposes can be carried out only by valuation companies operating in line with the requirements of the International Valuation Standards Committee (IVSC).
Valuation for IFRS purposes includes the following types of valuation:
• Valuation for IFRS 1 purposes, ‘First Adoption of the International Financial Reporting Standards’
The purpose of valuation is finding a fair value of fixed assets of the company, the reports of which are being composed for the first time with a purpose of an adequate appraisal of its financial condition. Normally, the properties being valued in such situations are fixed assets and properties under construction possessed by the company. In some particular cases it may be intangible assets of the company.
• Valuation for IFRS 3 purposes, ‘Companies Merging’.
The purpose of the valuation is finding a correct value of a purchased company on the balance of the purchasing company (purchase price allocation). The properties under valuation in this case are tangible and intangible assets, as well as obligations of the target company. Determination and valuation of intangible assets is one of the most important steps in this procedure..
• Valuation for IAS 36 purposes, ‘Assets Impairment’ .
The purpose of such valuation is determining the value of the company’s impaired assets in case if economic conditions deteriorate.
• Valuation for IAS 16 purposes, ‘Fixed Assets’.
In a number of cases the Standards require annual revaluation of the Company’s fixed assets by an independent valuer.
• Valuation for IAS 38 purposes, ‘Intangible Assets’.
The purpose of this valuation is a justified reflection of the company’s intangible assets in line with IFRS requirements.’
• Valuation for IAS 39 purposes, ‘Financial Instruments’
The purpose of the valuation is a justified reflection of the company’s financial investments in line with IFRS requirements.
• Valuation for IAS 40 purposes, ‘Investment Properties’
The purpose of the valuation is an obligatory annual revaluation of properties meant for investments.
Valuation for IFRS purposes is one of our main fields of activities.
Core Features of Valuation for IFRS Purposes:
• The works are carried out in line with the International Valuation Standards Committee (IVSC) requirements that set up high standards of the valuation methods and procedure.
When performing the valuation for IFRS we strictly stick to the requirements of the International Valuation Standards and apply our practical experience.
• There are three parties involved in the valuation process: valuer, customer, and auditor who uses the valuation results for composing financial reports. The work of the valuer is subject to reviewing by both the customer’s and the auditor’s representatives.
Our company has a profound experience in cooperation with the auditing firms of the ‘big four’ on approving the reports composed for IFRS purposes in various economics fields.
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