Companies require reliable valuations to underpin value for transactions, tax, accounting and financial reporting reasons. Whether you are seeking a valuation for corporate governance or regulatory reasons, for accounting purposes or to simply better inform your decision-making processes we understand the need to act quickly and efficiently.

Our team of qualified valuation service professionals has extensive valuation-technical and industry experience and will spend time understanding the specifics of your business, using benchmarking analysis against sector and industry benchmarks. Our relevant valuation methodologies allow us to offer you quality, meaningful opinions.   

Read more below to find out how they can help you concerning valuations for financial reporting purposes or click above to scroll to the topic of your choosing.

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Valuations for financial reporting

Our accounting support valuations team has the expertise to provide valuations for financial reporting purposes under BE GAAP or under IFRS (including valuations in the framework of IFRS 3, IFRS 16, IAS 36). Our team is ready to help you throughout the entire transaction cycle, offering guidance from start to finish, as well as a focused approach on specific phases within the cycle. 

Business combinations under IFRS 3

IFRS 3 requires acquisition accounting to be applied to all business combinations in its scope. This process is also referred to as a Purchase Price Allocation or PPA. It generally requires assets acquired and liabilities assumed to be measured at their fair values on the acquisition date. 

One of the key aspects of a PPA is the identification and measurement of intangible assets that were acquired, such as brand names, customer contracts and relationships, technology and intellectual property.

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Impairment testing (IAS 36 or BE GAAP)

Impairment testing is a complex area of financial reporting that requires careful judgement and is subject to increased scrutiny by regulators. IAS 36 Impairment of Assets sets out the procedures that entities must apply to ensure that their assets are carried at no more than the amounts expected to be recovered through the use (“Value in Use”) or sale (“Fair Value Less Costs of Disposal”) of the assets. We can guide you through how the requirements of IAS 36 are applied in practice.

The new IFRS 16 standard, effective from January 2019, may impact both a Cash Generating Unit`s (CGU) carrying amount and the way the recoverable amount of the CGU is measured. Companies should ensure consistency between the carrying amount and the recoverable amount of a CGU in an IAS 36 calculation, as well as taking into account the more general impact of IFRS 16 on valuations (DCF approach as well as the multiples approach).

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Determination of Incremental Borrowing Rates (IFRS 16)

Due to the introduction of IFRS 16 Leases, lessees are required to recognize a lease liability and corresponding right-of-use asset for all operating leases in their financial statements from January 2019 onwards. The determination of a discount rate is an important step in determining the present value of the lease payments. If the interest rate implicit in the lease cannot be readily determined, the lease payments can be discounted using the incremental borrowing rate (IBR). [IFRS 16.26, 63(D), 68]

The IBR is the rate of interest that a lessee would have to pay to borrow, over a similar term and with a similar security, the funds needed to obtain an asset of a similar value of the right-of-use asset in a similar economic environment. We can assist in determining the appropriate incremental borrowing rates for your leases. 

Virtual Power Purchase Agreements (IFRS 9)

Synthetic or “virtual” power purchase agreements (VPPAs) are increasingly common. Our specialist team can help you determine the fair value of your VPPAs, while giving guidance concerning the accounting treatment, which may not always be straightforward.

VPPAs allow corporate buyers to sign long-term contracts guaranteeing the price of renewable electricity without needing to physically purchase electricity.

Entering into a VPPA allows a company to hedge actual electricity purchases, meet corporate sustainability goals, increase brand awareness, and/or benefit from a financial contract.

The corporate buyer becomes a “guaranteed off-taker” to enable renewable energy developers obtain financing for construction. During the operational phase, the renewable energy facility sells its electricity into the wholesale market. 

Accounting for VPPAs

VPPAs often take the form of a “contract for differences”, which will generally meet the definition of a derivative (IFRS 9), requiring measurement at fair value at the VPPA signing date and every reporting period thereafter. 

A VPPA may be structured to have changes in the fixed fee (i.e., escalator), subject to caps and floors, combined with different electricity markets. These characteristics need to be reflected in the valuation of the VPPA. Our team has significant experience in determining the fair value of VPPAs and would be happy to assist you.


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Investment and transactional advice

Start-ups and scale-ups

Although the typical valuation approaches are relevant in a start-up or scale-up context, it is likely that none of the methods will provide conclusive results for the companies that have no historical track records. Which is why considering different valuation approaches is vital. We aim to actively assist young, dynamic start-ups (or scale-ups) and its funders on this matter.

One of the key items is to understand the potential market size for the start-up’s (or scale-up’s) products or services and the share that it might be able to take as well as the synergy potential in case the potential investor is an industry player.

Joint ventures and alliances

We can advise you on all aspects of valuation during the lifecycle of a joint venture or alliance. If this happens in an international context, we include local relationships and expertise in our team so you have the full understanding of the strategic, financial, operational and legal implications of creating and setting up a joint venture.

From entering into a joint venture, involving the identification of contributed assets and the ex-ante valuation of the joint venture to valuation matters that arise on exit, our network of Deal Advisory professionals helps you enhance value at every stage of the joint venture lifecycle by focusing on the key questions:

  • What are the key assets or activities to be contributed and what value should be allocated to these? How do I design a robust partnership, built to last?
  • How do I operationalize this new partnership?
  • How do I ensure that cultural issues do not become an obstacle to the alliance?
  • Is my portfolio of partnerships delivering all possible value?


Joint ventures and alliances
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Valuations in a tax context

Simplification of a group structure

Group structures can become involuntarily more and more complex through acquisitions, mergers, joint ventures and carve outs. This unwanted complexity can mean that the group structure no longer supports the way the business is managed and leave you with a large number of redundant / dormant companies which require time and effort to maintain, for little benefit.

Our team can help you simplify things by performing a valuation of the legal entity or entities affected by an intra-group restructuring to help ensure that such transactions take place at arm’s length.

Contribution-in-kind transaction or intra-group sale

This type of transaction involves intangible assets such as intellectual property, including brand names, certain licenses, patents related to specific technologies, customer relationships or others in the context of changes made to a company’s structure or organization. 

Employee stock option plans (ESOPs)

Stock options are taxable at the grant date on a lump sum basis. In principle, any gains resulting from the exercise of the options and/or from the sale of the underlying shares at a later point in time, remain tax-free.

The taxable amount is equal to a certain percentage (between 9% and 18% depending on the conditions) of the fair market value of the underlying shares. Companies generally have a choice of what option pricing model they prefer to use in valuing stock awards. The fair value of an ESOP is generally estimated using an option-pricing model like the Black-Scholes model or a binomial model. 

We can assist in determining the fair market value of the shares underlying the option, as well as the value of the options at grant or exercise date, or at interim dates for financial reporting purposes.

Management incentive plans

In many private equity-led management buyouts, management is incentivized through a management incentive structure (or ratchet structure).  This type of compensation is meant to align private equity holders with their capital providers, as it is the major source of their compensation. This management incentive can take the form of sweet equity, preferred equity, warrant plans, options or carried interest (“carry”). 

Our team has robust experience in valuing this (often complex) type of financial instrument using tailored valuation approaches, such as Black & Scholes, binomial models, and probability-weighted expected returns (“PWERM”), among others. In this type of valuation, we often work closely with the KPMG Tax & Legal team to ensure a broad range of perspectives on the valuation are considered and covered.


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Fairness opinions & independent board advice

Public takeover offers

This includes a review of the bidder’s bid price justification with respect to all valuation methodologies applied by the bidder to determine the bid price per share. This can be used as input for the ‘position statement’ of the target company’s board of directors.

A conflict of interest procedure

In this case, a committee of three independent directors is asked to evaluate a proposed related party transaction prior to its execution and provide advice to the board of directors (Article 7:97 of the new Code of Companies and Associations, Article 524 of the old Code). 


Squeeze-out procedures

Within this framework, our team will mainly focus on the assessment of the fairness of the price (fair market value) determined by the majority shareholder and confirmed by an independent expert.

A Royal Decree was published in the Belgian Official Gazette on 5 October 2018 containing, among other items, amendments to the Takeover Decree (Royal Decree of 27 April 2007 on takeover bids) and the Squeeze-out Decree (Royal Decree of 27 April 2007 on squeeze-out bids).

In relation to the appointment of an independent expert and the opinion itself, important amendments to the Squeeze-out Decree include the following:

  1. The terms and conditions of the bid (including the price) should not jeopardize the interest of the holders of securities in the target company. This newly-formulated requirement is based on existing case law.
  2. The appointment process of an independent expert must be compliant with new, stricter documentation rules, e.g. at least three possible providers of independent expert advice must be contacted and the basis for the final selection of the independent expert should be documented.
  3. The creation of stricter criteria and rules regarding remuneration and expertise of the independent expert to warrant the quality of the provided opinion. In addition, the independent expert must demonstrate how he or she meets the relevant independence requirements.
    The Financial Services and Markets Authority (FSMA) is allowed to appoint a new independent expert if it is of the opinion that the appointed independent expert does not meet the relevant criteria.
  4. The independent expert must declare – without reservation – that the price offered to the holders of securities in the target company does not jeopardize their interests.
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Valuations for other purposes

Financing purposes

In the context of a financing process, providers of debt financing may request an independent valuation of the company or business, in order to get additional comfort on the loan-to-value ratio. This often happens with young companies (where the value is in expected growth) or with companies where the value resides mainly in intangible assets, such as in management contracts or in other assets that are not necessarily expressed on the balance sheet of the company. 

Dispute valuation

As the business environment becomes increasingly complex and demanding, business partners are more likely end up in a dispute. Such disputes can be resolved in a number of ways, amicably or (more frequently) through mediation, arbitration or litigation.

We offer dispute services related to transactions, including dissolution of joint ventures, determination of price-per-value under shareholder agreements for good/bad leavers as well as non-transactional disputes.

Our role in such a process can include:

  • acting as an independent (valuation) expert appointed by both parties, or by the court;
  • advising clients in arbitration and/or litigation cases with a valuation component, such as in cases of exclusion of shareholders or in relation to the law of 27 July 1961 on the unilateral termination of certain categories of distribution agreements.
Dispute valuation

Succession planning

A good succession plan can be the first step in maintaining the strength of a company and safeguarding a family’s prosperity for generations to come. We provide owners with insights into the fair market value of their companies and a basis for further succession planning. In this context, we usually cooperate closely with KPMG’s succession planning specialists.

Cost of capital advice

Estimating realistic costs of capital is crucial when making investment or transaction related decisions or for impairment testing exercises (IAS 36).

We can assist you with this and provide guidance on the different components of the WACC or cost of capital as presented graphically below. Having a good and consistent view of the different variables is essential for determining an appropriate cost of capital.