Post merger or acquisition to allocate the purchase price of the acquired company among its identifiable assets and liabilities. This allocation helps assign values to tangible and intangible assets like patents, trademarks, and goodwill, ensuring that financial statements reflect the true economic value of the acquisition.
Fair Valuation of Shares
It refers to determining the true or intrinsic value of a company’s stock, considering factors like earnings, growth prospects, industry conditions, and risk. Methods like Discounted Cash Flow (DCF), Comparable Company Analysis (CCA), and precedent transactions are commonly used to assess.
Section 11UA of the Income Tax Act
It is used to value unquoted shares and securities for tax purposes in India. It mandates prescribed methods like Net Asset Value (NAV) and the Discounted Cash Flow (DCF) method to arrive at the fair market value for taxation.
Enterprise Valuation
It is a comprehensive measure of a company's total value, including both equity and debt. It provides a more complete view of a company's value, especially useful for takeover or acquisition scenarios.
Discounted Cash Flow (DCF)
The DCF method calculates the present value of expected future cash flows. It is widely used for valuing companies, investments, and projects by estimating future returns and adjusting for time and risk.
CCPs and CCDs Valuation
Compulsorily Convertible Preference Shares (CCPs) and Compulsorily Convertible Debentures (CCDs) are hybrid securities that convert into equity over time. Their valuation typically relies on discounted cash flow methods or option pricing models to estimate their worth.
