Our International Valuation Newsletter series addresses current hot topics and upcoming themes. While some articles may focus on particular sectors or asset classes, all will have one thing in common: the provision of insights into the development and practical implementation of solutions to common challenges when valuing businesses and business assets. The newsletter is therefore of interest to those involved in valuations for transactions, financing, tax, accounting, restructuring and dispute resolutions, among other areas. It is also highly relevant to academics, lawyers and government or tax authorities.

International Valuations Newsletter – October 2021

The COVID-19 pandemic has placed an unprecedented burden on our global economy. Unlike other crises we have faced in the past decades, COVID-19 has caused fundamental disruptions in global supply chains and will have a lasting impact on consumer behavior. As we approach 2022, we may now begin to assess the impact these remarkable pressures have placed on businesses and their expectations for the future.

Goodwill impairment

In this edition of the Quarterly Brief, we examine 2020/2021 and observe what has happened through the lens of goodwill impairment in Europe. Many companies have not simply revisited their cash flow forecasts and discount rates; they have acknowledged the need to carefully reassess company value and whether it has declined more significantly than under normal conditions and whether existing budgets and cash flow projections should be abandoned completely due to the impact of COVID-19. We will attempt to compare recent developments with those of the past 15+ years, including prior major economic crises, to identify similarities at the sector level.

We will explore the following questions:

  • What is the broader impact of COVID-19 on goodwill impairment?
  • How do the levels of goodwill impairment compare to the 2008 global financial crisis and the 2012 European debt crisis?
  • What has been observed at the sector level?

Capital market data

In the final section, we cover the most recent capital market data for selected markets in our usual format. Here are the latest developments at a glance:

  • Major stock market performances: ongoing strong year-over-year performance of most main indices – how long will this trend last?
  • S&P Eurozone BMI Index sector multiples: over the last two quarters, six out of the eleven sectors showed decreased EV/EBITDA multiples. Are the bullish markets continuing to slow or is it just a temporary slowdown?
  • Risk-free rates: have not materially changed in the last six months. As of 30 September 2021, all five risk-free rates analyzed were positive, a state last seen for two consecutive quarters in the period from 31 December 2019 to 30 June 2020.


We look forward to discussing your questions regarding COVID-19’s impact on goodwill impairment trends as we look ahead to 2022. As always, stay safe and healthy.

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