Business valuation of small and medium-sized enterprises

Author wevalue AG

Revised technical bulletin from Expertsuisse

In September 2018, Expertsuisse published the revised technical bulletin “Business Valuation of Small and Medium-sized Enterprises (SMEs)”. It is recommended for business valuations after 1 January 2019. At the same time, Expertsuisse offers further support to the profession.


Unlike the audit of annual financial statements, a business valuation is not a recurring mandate, but always a project business. Nevertheless, and especially then, the necessary expertise must be up-to-date and the tools of the trade must be available in a timely manner.

The first professional communication on the subject of business valuations dates back to 1994 and was revised in 2008. At that time, the focus was on the valuation process and reporting, not on valuation theory.

Why a new version? There are three reasons:

  1. Especially in the valuation of SMEs, the gap between theory and practice is considerable. Now, one can complain about valuation theory being far removed from reality or valuation practice being far removed from theory – but one can also build bridges. The new professional communication is based on the current state of valuation theory and shows its application in practice. In doing so, the profession is not overburdened, but rather a binding framework is presented within which the solution of the individual case is at the discretion of the valuer.
  2. Business valuations must be legally secure in the interest of all parties involved and affected. The pluralism of methods in business valuation advocated by the Federal Supreme Court up to now does not mean arbitrariness. The line is to be drawn where “recognised valuation principles and methods have not been applied or have been applied incorrectly”. The new expert communication shows these limits in concrete terms.
  3. If one looks to Germany and Austria, the profession there has been quite active in matters of business valuations of SMEs. This alone is no reason for activity, but it does show the practitioners’ need for orientation. This is provided by the new professional publication. Supplemented by checklists, working aids and a comprehensive commentary, it not only presents what should be done, but also how it can be done.

The new Technical Note deals explicitly with the valuation of SMEs. However, the explanations can also be used without further ado for the valuation of larger companies.

Read the full article from EXPERT FOCUS 10|2018 (in German) here.

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