Financial reporting and fund valuations

Financial reporting valuations are often complex and technically demanding, with external auditors increasingly pushing businesses to provide additional support and seek external advice in these areas.

We can provide robust valuations to withstand auditor, regulator and stakeholder scrutiny. S&W possess a deep expertise in financial reporting valuations and can ensure a smooth audit review. We are a director and partner-led service, with senior stakeholders holding a wealth of experience and backgrounds within valuations.

We support clients from family-owned businesses to large, listed and private corporates. Our expertise helps ensure a smooth audit review and we are often referred and trusted by the leading audit firms.  

Whether you report under IFRS, FRS 102 or US GAAP, we can help with accounting-based valuations involving:

The valuation of acquired intangible and tangible assets and liabilities under IFRS 3, UK GAAP (FRS 102), US GAAP (ASC 805) and other major accounting standards.

Post-deal PPAs ultimately ensure accounting standards compliance  and that the fair value of acquired assets and liabilities is accurately reflected in the acquirer’s accounts. A robust valuation can help improve stakeholders’ understanding of acquisitions, reduce future impairment risk and ensure that reported earnings are not understated.

Pre-deal PPAs help acquirers assess the potential impact on earnings, balance sheets and sometimes financial covenants of recognising the fair value of a target’s assets, which may not already be capitalised.

S&W supports many clients performing periodic or annual impairment testing under IAS 36 or FRS 102 Section 27. 

As a complex technical area of valuation, mistakes are commonplace when assessing asset impairment and can materially impact the financial statements.

Our support can range from determining a suitable discount rate or weighted average cost of capital (WACC), long-term perpetuity growth rates, or reviewing/providing value in use or fair value less cost of disposal models.

The fair value of contingent consideration and earn-outs must typically be measured at fair value at the acquisition date and subsequently remeasured at each reporting date. This is crucial for both buyers and sellers to ensure fair and transparent disclosure of transaction costs, especially as changes in the fair value of earn-outs over time are usually recognised in profit or loss.

Reflecting a wide variety of potential earn-out mechanisms, we employ a number of different methodologies depending on the circumstances, including scenario/expected returns analysis, Monte Carlo or other option pricing simulations and other advanced valuation techniques to capture the range of possible outcomes and their probabilities.

The incremental borrowing rate (IBR) is a critical input under IFRS 16 (Leases) for lessees to measure lease liabilities when the interest rate implicit in the lease is not readily determinable. 

Changes to FRS 102 mean that reporters under UK GAAP will need to capitalise operating leases aligned to IFRS 16 from reporting periods beginning on or after 1 January 2026.

S&W has developed a range of approaches and proprietary models to help determine IBRs at the date at which a lease has been entered into, modified or acquired.  These have been subject to scrutiny by all major accountancy firms.

We can also support with right of use (ROU) calculations and technical accounting papers, where required.

Share-based payments are transactions in which a company compensates employees or other parties using its equity instruments, such as shares, share options or other instruments linked to the share value. These forms of share remuneration must be captured under IFRS 2 or FRS 102 Section 26.

Determining the fair value of share options and other share-based awards is often complex and may require the use of option pricing models such as the Black-Scholes, Binomial or Monte Carlo Simulation model.

S&W supports many listed and private company clients with the valuations of these share incentive awards.

For financial instruments measured at fair value, IFRS 9 requires the use of market-based valuation techniques. This includes using observable market data and often complex valuation models to estimate fair value.

S&W can support in determining the fair value of certain financial assets and liabilities, equity instruments and embedded derivatives.

Portfolio valuations can be complex, often including a mix of asset and investment types that require a breadth of expertise. Ensuring a robust valuation is critical, as they provide a comprehensive view of the portfolio's value, which is crucial for making informed investment decisions and providing assurance to key stakeholders.

We can provide detailed portfolio valuations of both UK and international investments, ensuring compliance with the International Private Equity and Venture Capital Valuation (IPEV) Guidelines. These set out recommendations intended to represent current best practice on the valuation of private capital investments.

S&W's valuation and sector experts are led by leading global accountancy partners and directors. Our team’s capacity guarantees we have the flexibility and experience to reliably produce robust, high-quality and cost-effective work that meets your requirements.

We also play an active part in leading trade and industry bodies that have an influence on changes affecting your business. We pride ourselves on delivering the specialist expertise you deserve, making sure your valuation is handled with quality and assurance.