When a set of financial statements comes across your desk, what are the key items you should look out for to determine whether a valuation should be sought to assist in the property settlement?

Below we set out five key items you should look out for which indicate that a valuation may be required.

  1. The income earned is from a trading business and is not passive investment incomeFamily Law and business valuations
  2. It has a consistent history of trading profits (after adjusting for a commercial remuneration for the owner)
  3. It incurs employment expenses for staff (excluding the owner)
  4. The assets of the business consist of production assets, such as machinery and equipment
  5. There are intangible assets on the balance sheet (such as goodwill)

Another indicator that the business may have a significant value is if it provides a service that requires a high degree of skill or manufactures a product that requires specialised equipment and capability.

The Family Law team at RSM includes two CAANZ accredited Business Valuation Specialists who can assist with the preparation of a market valuation for use in all stages of a Family Law matter or review of financial information / other valuations.

For more information

If you have any questions or would like to discuss the valuation process in more detail, contact your local RSM adviser today or visit our website at rsm.com.au/familylaw.