Client Case Study

2. Case Challenges:

• Limited Access to Information:
  • The availability of historical financial data and other relevant information related to the past acquisition was limited.
  • Obtaining accurate and comprehensive data posed a challenge, requiring additional efforts to gather necessary information from various sources.
• Intangible Asset Valuation:
  • Evaluating the value of intangible assets, such as brand value, patents, and proprietary technology, was complex and subjective.
• Assumptions and Projections:
  • The acquisition taking place during the COVID-19 pandemic introduced unique challenges and uncertainties.
  • The pandemic had a significant impact on businesses and industries, leading to market volatility, disrupted supply chains, and changes in consumer behaviour.
• Uncertain Industry Factors:
  • The industry faced a high degree of uncertainty due to the pandemic’s impact, making industry forecasts and projections challenging.
  • Market trends, consumer preferences, and regulatory changes were constantly evolving, making it difficult to accurately predict the industry’s future performance.

3. Overcoming the Challenges:

1. Thorough Data Analysis:
   • Despite limited access to information, we conducted extensive research and data analysis to ensure accurate and comprehensive valuation.
2. Intangible Asset Valuation Expertise:
   • Leveraging our expertise in intangible asset valuation, we employed robust methodologies and considered market comparables to determine fair values.
3. Scenario Analysis:
   • To address the uncertainties caused by COVID-19, we performed scenario analysis, considering multiple potential outcomes and their impact on the company’s financials and valuation.
   • This approach allow
   • ed us to assess the company’s resilience and adaptability to various scenarios, including different recovery timelines and changing market dynamics.
4. Sensitivity Analysis:
   • We conducted sensitivity analysis to evaluate the impact of key variables and assumptions on the valuation results.
   • By varying these factors within a reasonable range, we assessed the company’s valuation under different scenarios, providing a more comprehensive understanding of its value.
5. Incorporating Risk Factors:

• • We carefully considered the specific risks associated with the COVID-19 pandemic and industry uncertainties when determining discount rates and adjusting projections.
  • This ensured that the valuation appropriately accounted for the heightened risks and uncertainties during the acquisition period.

When addressing the auditors’ concerns, we provided clear and detailed explanations for the assumptions made, methodologies employed, and data used in the valuation.

We ensured that our responses were concise, logical, and backed by industry standards, regulatory compliance, and best practices. We also ensured strict compliance with Singapore accounting standards, regulations, and guidelines throughout the valuation process.