When and about what did we know something?

The Corona timeline for business valuations

The consensus view is that the effects of Covid-19 should not be taken into account in objectified business valuations for 31 December 2019. We have now been asked how to proceed with subsequent valuation dates. Especially valuations required by law (e.g. in property and inheritance law) are to be prepared for reference dates during the year – e.g. 20.02.2020.

Was the extent of the crisis recognisable on 20.02.2020? Looking back, one is always smarter, but that is not the point. Rather, we need to ask ourselves what was known on that day. The WHO reported 76,000 infected people on 20.02.2020, while the SMI reached an all-time high. There was no trace of a recognisably gloomy mood. In mid-March, the world – and the SMI – looked different.

Helpful for such considerations is the timeline of Covid-19 facts (with evidence) recently published by Hitchner/Warner, supplemented by the development of the capital market. This is a good tool for justifying and documenting the level of knowledge taken into account in the valuation in a transparent and defensible manner.