Insight
What documents do you need for a business valuation?
A business valuation starts with a clear question: what is being valued, at what date, and for what purpose? An organised set of documents helps a valuer understand the business and identify gaps early. It also reduces time spent reconciling figures that tell different stories.
You do not need to produce every document below before making an enquiry. Use this checklist to identify what is available, what your accountant holds and what may need explanation. The final request should reflect the scope of your valuation.
Start with the purpose and ownership structure
Explain whether the valuation concerns the whole business, particular assets or a parcel of shares. Identify the proposed valuation date, the decision being made and the people expected to rely on the report. A transaction, shareholder exit and tax matter may call for different instructions.
Prepare a structure chart, current share register and details of relevant share classes, options or other interests. Provide the constitution, shareholders agreement and proposed transaction documents where relevant. Flag any clause that specifies a valuation procedure; ask your legal adviser to explain its effect.
Bring financial records together
Start with recent annual financial statements and the latest management accounts. Several years of results can help explain trends, although the period required depends on the business and assignment. Include a current balance sheet and a reconciliation between management reports and final accounts if they differ.
- Profit and loss statements, balance sheets and cash-flow information.
- Revenue and margin breakdowns by product, service, customer or business unit.
- Receivables, payables and inventory ageing reports.
- Debt, lease and shareholder loan schedules.
- Details of significant assets, surplus cash and non-operating investments.
Label draft figures clearly. If one report includes a related entity and another does not, explain the difference rather than leaving the valuer to infer it.
Explain unusual items and owner involvement
Provide a short schedule of significant one-off income or expenses, changes in accounting treatment and transactions with related parties. Include supporting records and explain why each item may need separate consideration. An expense is not automatically excluded from earnings because an owner describes it as unusual.
Describe the owners’ roles, remuneration and time commitment. Identify functions that would need replacement if an owner left, together with the responsibilities of key staff. This gives context to the reported result and the resources needed to sustain operations.
Share forecasts and their assumptions
If budgets or forecasts exist, supply the underlying model and assumptions as well as the summary. Explain expected sales growth, margins, staffing, capital expenditure and working-capital needs. Distinguish signed work from opportunities and management targets.
Where forecasts are unavailable, say so. A short explanation of current trading and foreseeable changes is more useful than a newly created projection with unsupported assumptions. Historical valuations also require care: the ATO emphasises relevant information known, or reasonably foreseeable, at the valuation date in its market valuation guidance.
Add the commercial context
Gather material customer and supplier contracts, premises leases, licences and information about intellectual property. Explain customer concentration, renewals, competitive pressures and reliance on particular people or suppliers. Include significant disputes or contingent obligations where relevant, with advice from the appropriate professional.
A brief business overview can connect these documents: what you sell, how customers are won, why they stay and what has changed recently.
Agree a practical handover
Create a simple document index with reporting dates and version names. Nominate one contact for follow-up questions, and agree a suitable way to share confidential material before sending it. Mark missing information and expected delivery dates so the scope can be assessed realistically.
For help defining the information needed for your circumstances, explore business and share valuations or request a consultation.
Further reading
- International Valuation Standards Council: valuation standards and scope.
- Australian Taxation Office: market valuation for tax purposes.
Related reading
General information only. The appropriate valuation approach and requirements depend on the circumstances, agreed scope and intended use. This article is not a valuation of a particular business or individual legal, tax or financial advice.
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