Corporate Valuations is a specialised area in our Financial Advisory Services division responsible for Valuation and related Corporate Advisory. Unlike many valuation specialists, the Valuation & Advisory team looks beyond the immediate need to measure value. We have found that clients want more than just a view on value today. More clients are more interested in how this value can be increased and how things will look tomorrow. How does the asset fit into the corporate strategy and how can they best maximise the return on assets.
In this context, we work proactively with our clients to analyse the value drivers, understand how value can either be protected or enhanced and if required establish the best way for this enhanced value to be realised.
Proper valuation is a complex process involving detailed analysis and industry expertise. We have a dedicated team of thirty five Indonesia based valuation specialists who are supported by the regional and global resources of our worldwide valuation practice. Our experience in performing valuations enables us to ensure that our service meets client’s needs and to recognize how those needs can best be met.
A valuation of a company or business assets requires a thorough understanding of the business which involves an independent, objective and experienced assessment of a number of factors, including:
- The industry in which the business operates
- Investors expectation of the relevant industry
- The products, markets, competitors and market share of the business
- The trading and financial record of the business
- The caliber of management and key employees
- Future prospects for the business and
- The marketability of the business assets or shares in the company.
By drawing upon our industry experts, our knowledge of transactions gained through our corporate finance practice and our global network, we ensure that the valuation takes full consideration of all industry-specific and country-specific issues.
Valuation is the language of business today. With the increasing demands for improved corporate decision making and corporate governance, there is an increasing need for superior quality valuation reports. We undertake valuations for:
- Business and shares valuation
- Deal support and negotiation
- Intangible asset valuation
We undertake the valuation of entire businesses, shares, interests in joint ventures, company debt and share options. We have undertaken valuations for many of Indonesia’s leading companies.
Whilst we have access to the latest international valuation techniques (such as real options valuation), our approach to value is practical - we have access to databases for comparable company analysis and market transactions, ensuring that our valuation advice is always relevant to the Indonesian market.
New accounting standards have required companies to perform valuations for the purpose of financial reporting in areas such as: business combination (i.e. Purchase Price Allocation (PPA) & impairment testing), stock-based compensations, and hedging activities. For clients reporting under these standards, the change to the new standards is exposing them to increased risks. Adopting these standards requires a solid understanding of the standard itself, including recently proposed and future amendments, and its accounting and valuation requirements. We help the clients to manage this high-impact issue to ensure that material valuations are robust, supportable and approved by their auditors. We provide services as follows:
- Pre/post-deal PPA (PSAK 22/ IFRS 3)
- Impairment testing (PSAK 48/ IAS 36)
- Fair value for financial instrument (PSAK 71/ IFRS 9)
- Restricted Stock Units and ESOP Valuation (PSAK 53/ IFRS 2)
As companies engage in a transaction, sometimes it has tax implications that should be considered. The Indonesian Tax Office (ITO) has specific internal valuation guidelines which are followed by their internal team to perform valuation related to the transaction and determine the amount that is subjected to tax. Due to these guidelines, M&A valuation reports could not necessarily be used for tax purposes.
PwC advises clients on valuation for tax purposes to avoid unnecessary risks that may arise and help clients to obtain better terms with the ITO. We have extensive experiences with various multinational and local national companies in providing valuation service for tax purposes. We provide services as follows:
- Business/share valuation in accordance with tax rules (SE-54/2016), both pre-tax audit and post-tax audit
- Valuation support assistance (during tax audit), together with PwC tax team
- Valuation review
- Purchase price allocation
All firms talk about Shareholder Value, although very few consistently generate premium returns for their shareholders. We focus on optimizing the firm’s strategic value via exploring the value of the options available to improve that value. We assist the client to identify tasks and decisions such as making an acquisition, restructuring of the business to release capital, operational and financial decisions – that improve firm value. Our services is as follows:
- Assessing deal value (e.g. economic profit)
- Financial feasibility study
- Value Creation in Deals (VCiD)
- Financial modelling
- Optimal capital structure
- Asset pricing analysis
