List of Financial Advisory Services
(1) Fiancial Due Diligence
Financial due diligence is the process of analyzing the financial condition and business performance of a target company in order to identify potential problems that may arise in the execution of a financing transaction, such as M&A or underwriting a capital increase.
This process has the effect of increasing the probability of success and safety of the investment decision by identifying as many risks as possible before the investment decision is made, such as deterioration of the target company's assets, lack of normal profitability, and other contingent liabilities, which should not materialize after the acquisition.
Specifically, the depth and breadth of financial due diligence varies depending on the purpose, scope, and duration of the investigation, but it includes interviews with management, examination and review of the target company's financial data, and on-site inspections. We report to management on what we learn from these investigations and, upon request, provide advisory services, including the consideration of acquisition schemes.
For financial due diligence we have a team of CPAs who are experienced in financial analysis and reorganization practices, and can proceed with the work efficiently. We are flexible and prompt in handling both large-scale and small-scale projects, and we always engaged in several such projects.
We also have certified tax accountants who are well versed in organizational restructuring and can support optimal M&A from a tax perspective. We have a proven track record in recommending and selecting potential sellers and buyers, and we offer advice from our extensive network that contributes to the enhancement of corporate value.
When a company sells shares or issues subscription rights, its shares and subscription rights must be valued individually. Valuation of shares is done in capital increases, mergers and acquisitions, inheritances, etc., while valuation of subscription rights is done in stock option issues, capital policies, etc.
In addition, asset valuations are becoming increasingly important in light of impairment accounting standards and IFRS convergence. The valuation of individual assets such as fixed and intangible assets are increasingly being performed by third-party valuation firms.
Our core team consists of CPAs and certified tax accountants who are skilled in valuation practices. We provide appropriate valuations for each case from both accounting and tax perspectives, as well as additional advice aimed at increasing corporate value.
In the area of stock valuation, we handle a wide range of valuations, including valuations based on finance theory as well as those based on the Japanese tax authority's published "Property Valuation Basis for Calculating of Inheritance and Gift Taxes."
In addition, in order to reflect a wide variety of vesting conditions in the valuation of stock acquisition rights, we conduct valuations based on financial engineering such as the Black-Scholes model and the binomial model.
In addition to valuations at the time of third-party allotment of shares and issuance of stock acquisition rights by listed companies and companies planning to go public, we have a great deal of experience in appraisal work, including valuations at the time of stock transfer that take into consideration inheritance.