Professional people are not immune from relationship breakdowns and sometimes those involved are unable to come to agreement on the value of assets. Investments, such as superannuation funds, usually have a current value that is easily recognised, while the complexity of ascertaining a value for the intangible assets associated with practice valuation often cause disputes to run on.
Sometimes disputes are prolonged because accountants or other valuers (without having substantive knowledge of the practice market) place an unrealistic value on the practice. Parties will often shop around for a valuation, perhaps getting several and making a claim based on a value heavily biased toward their own interest.
When this occurs, we advise the parties to jointly appoint us to value the practice, whether by mutual agreement or court order.
We will prepare a thorough financial analysis of the practice concerned, and calculate a fair assessment of its value, presented in a well-written report by an acknowledged specialist. Parties have a defined period of time to raise queries after which the valuation gains legal weight. It is our experience that this approach minimises legal and valuation costs for all parties whilst providing an equitable outcome.
Where both parties do decide to appoint their own expert, we observe that the other parties’ legal counsel rarely challenge our valuation. Most of the valuations that we see from external accountants and valuers have been distorted with little actual evidence or reasoning as to how the value was determined. When the opposing parties' valuer is confronted with a thorough, well-researched valuation, they often choose not to contest the matter further in court.