Tax Valuation (valuation to support purchase price for fiscal purposes)

 

What

Economic-financial valuation of a company in order to provide economic support to the transaction`s goodwill. 

 

When

When a company is acquired by a value higher than it`s accounting Net Worth, in other words: the transaction has an implicit goodwill. The transaction`s goodwill can be amortized in a period between 5 and 10 years, once it is economically supported, as stated in the Regulamento do Imposto de Renda (“RIR”, or Brazilian Income Tax Regulation) of 1999 – Decree 3000/99, paragraphs 385 and 386. 

 

How

Application of specific concepts, theory, approach and methodology, widely recognized to determine economic value of enterprises. Gathering of historical and prospective information of operating, managerial and accounting  information, along with market data, to assemble an financial economic model that calculates the enterprise value, as well as other operating and financial parameters. 

 

Format

This report must be presented according to the requirements of RIR and the needs of fiscal auditors. Usually, for this service, the report has an extensive form, detailing techniques, approach, methodology, assumptions and results.