Insight
How long does a business valuation take?
A business valuation timetable should be agreed after the purpose, scope and available information are understood. The time from your first enquiry to the final report includes more than the valuer’s analysis: instructions, document collection and responses to questions all affect delivery.
A useful first question is, “What needs to be available before the proposed delivery date is achievable?” A deadline stated without those dependencies can give a misleading impression of certainty.
The main stages
- Define the assignment. Identify the business or interest, purpose, valuation date, intended users and reporting needs. Any relevant agreement or adviser instructions should be considered at this stage.
- Collect and assess information. Assemble financial records, current trading information, forecasts where available, and ownership documents. Identify gaps and conflicting versions.
- Understand the business. Discuss how it earns money, the role of the owners, its key relationships and changes affecting future performance.
- Analyse value. Consider suitable methods, financial adjustments and relevant evidence. Investigate material differences between assumptions or results.
- Complete the reporting process. Address outstanding factual questions and document the conclusion, assumptions and limitations in the agreed form.
Not every engagement follows an identical sequence. Some questions can be addressed together; others must be resolved before meaningful analysis can continue.
What commonly holds up progress?
Missing accounts are an obvious obstacle, but unclear instructions can be just as significant. A request to value “the business” needs clarification if the actual subject is a minority shareholding in one company within a group.
Other dependencies include unreconciled owner loans, material differences between management and annual accounts, unavailable lease documents, or forecasts that do not explain their assumptions. A change in the transaction structure or valuation date may also change the required work.
When a lawyer, accountant, auditor or another party is involved, identify their requirements early and agree who will consolidate questions. Multiple, conflicting instruction channels can create unnecessary rework.
The valuation date is different from the delivery date
The valuation date is the date at which value is assessed. The report date is when the report is issued. They may be different, particularly for an historical transaction or estate matter.
For tax valuations, the ATO’s guidance emphasises relevant information known or reasonably foreseeable at the valuation date. This helps explain why a historical assignment may require earlier records and careful treatment of later information, rather than simply using today’s trading result.
How to make the timetable more reliable
- Explain the deadline and the event behind it at the first discussion.
- Use a document index that identifies reporting periods and current versions.
- List missing items with expected availability dates.
- Nominate a contact who can coordinate financial and operational questions.
- Reserve time for questions and factual clarification, not only initial document delivery.
For example, if draft accounts are available but the owner loan balance is unresolved, flag the issue immediately. The valuer can then assess whether work can progress, whether an assumption is appropriate or whether the conclusion depends on resolving it. Avoid presenting uncertain information as final simply to meet a timetable.
What if the deadline is urgent?
Ask whether the required scope can be completed responsibly within the available time. An urgent request does not make missing evidence less relevant. If the work cannot be completed as required, discuss the implications with the adviser or party setting the deadline.
Read our valuation document checklist and valuation approach, then contact Evident Valuations with the purpose, relevant date and deadline. We can discuss an appropriate timetable once the assignment is understood.
Related reading
- What documents do you need for a business valuation?
- How much does a business valuation cost in Australia?
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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