01Value is always at a date
Businesses change constantly: profits rise and fall, markets move, contracts are won and lost. A valuation is therefore always a conclusion of value at a specific date. Without a date, a figure has no meaning.
02How the date is set
The date usually follows from the purpose of the valuation.
- Tax: the date of the gift, disposal, acquisition or other taxable event
- Probate: the date of death
- Share transfers under articles: often the date of a transfer notice or another date the articles specify
- Divorce: usually a recent date, although the court can direct otherwise
- Disputes: the date relevant to the claim, which may be years ago
- Transactions: the expected completion date or an agreed locked-box date
03Historic valuations and hindsight
When the valuation date is in the past, the general principle in many contexts is that the valuer should consider only what was known or reasonably knowable at that date. If a major customer was lost a year after the valuation date, a buyer at the date would not have known that, and the loss should not usually reduce the value.
There are exceptions, and the correct legal approach can depend on the purpose. In some disputes, later information may be admissible as evidence of what could have been foreseen. The valuer takes instructions on the approach and states it clearly.
04Information at the date
Historic valuations depend on reconstructing the information that existed at the date: management accounts, forecasts, board papers and market data. Where these are incomplete, the valuer records the gaps and the assumptions used to fill them.
This guide is general information, not advice on any particular situation. The correct approach to a valuation depends on its purpose, the basis of value and the facts.
