The cost of business valuation is based on many factors and is divided into many different calculation methods. So how much is the business valuation cost, and according to what regulations?
What is the cost of the business appraisal?
Expenses for enterprise valuation shall be made according to the agreement between the price appraisal company and the price appraisal customer according to the provisions of Article 11 of Decree 89/2013/ND-CP detailing the implementation of several articles of Law on price appraisal.
All will be recorded in the appraisal contract; in the case of bidding, it shall comply with the provisions of the law on bidding for consultancy service bidding packages.
Factors Determining the cost of Property appraisal
Many factors affect property appraisal fees. For each different type of business, the factors to determine the cost of property appraisal are also different. In general, it is usually based on the following grounds:
1. Contents, volume, and type of assets, time to conduct a valuation
2. Expenses incurred during the appraisal process: travel expenses for surveying, property inspection, taxes as prescribed by law, fees for renting valuation-supporting equipment (if any) …
Determining the cost of valuation of state-owned enterprises
Expenses for the valuation of equitized enterprises are expenses specified in Circular 196/2011/TT-BTC dated December 26, 2011, of the Ministry of Finance. It is estimated that this cost is about 30-40% of the cost of equitization.
If the enterprise uses the underwriting method, leading to the cost of equitization exceeding the prescribed framework, the Equitization Steering Committee shall report to the equitization decision-making body for consideration and approval in the equitization plan.
If the enterprise uses the underwriting method, leading to the cost of equitization exceeding the prescribed framework, the Equitization Steering Committee shall report to the equitization decision-making body for consideration and approval in the equitization plan.
Thus, the price of valuation services is based on the agreement between the valuation enterprise and the appraisal customer. Expenses for valuation to determine enterprise value for the equitization of state-owned enterprises shall be determined according to Circular 196/2011/TT-BTC dated December 26, 2011, of the Ministry of Finance.
Depending on the specific conditions, the appraisal cost will be adjusted accordingly.
Legal documents to be provided when appraising businesses
To appraise a business, companies often provide the following relevant legal documents:
- Audited/unaudited financial statements or internal audit reports (last 5 years)
- Five-year business plan (approved by the Shareholders Council)
- Charter of the company
- Last changed business registration license
- Organizational chart of the company
- Certificate of ownership of shares/shares (if any)
- Tax finalization documents (if any);
- Certificate of ownership of shares/capital contribution (if any);
- Contracts for purchase, sale, and service provision;
- Investment cooperation and joint venture contracts;
Subjects of application in business valuation:
- Equitization, transfer,
- Business mergers and acquisitions,
- Mortgage, loan guarantee,
- Identify shares, securities,...
- Equitization of enterprises with 100% state capital
- Expected significant changes in the companys ownership or capital structure: merger, joint venture, association, capital transfer, company acquisition, or franchise...
- Preparing to issue bonds for the first time to the public
- Expanding the scale of operations, or changing the organization of production and business activities.
To know the exact value of the business, you should look to the valuation units with a lot of experience and expertise to assess the market and price accurately, so they will make the most accurate and fastest judgments.
One of the leading prestigious appraisal units in Vietnam is SunValue. With more than 20 years of establishment and development, SunValue is proud to become one of the leading real estate appraisal units in Vietnam, the leading brand in Vietnam 2023, and the strong brand in Asia 2021, with a system of nearly 50 Branches and transaction offices across the country. As a reputable, independent valuation unit, pioneering the application of technology in valuation, helping to monitor real estate price fluctuations, and completing price data to support the development of Vietnams real estate market and International.
Contact SunValue now for questions and consultation!
SunValue – National brand that has actively contributed to the development of the appraisal industry in Vietnam.
