Business Valuation is the process of determining the true, fair market value of a business or a company. Coupled with the use of mergers and acquisitions as a common corporate growth strategy, valuation is undoubtedly growing in importance as a highly sought after expertise. It is used in the financial and business markets to determine the price that market participants are willing to pay or receive to effect a sale or purchase of a business or a company. It encompasses estimating the values of individual assets and liabilities, which typically include intangible assets, property, plant and equipment, real estate and financial instruments such as debts, derivatives and hybrid securities.
The realm of financial reporting has also required the valuation of assets and liabilities. For standards such as FRS 113 Fair Value Measurement, FRS 103 Business Combinations, FRS 40 Investment Property, FRS 39 Financial Instruments: Recognition and Measurement and FRS 38 Intangible Assets all stipulate the need for valuations of assets and liabilities under different circumstances.