Publication

16 July 2001

Business Valuation: A Guide for Small and Medium Sized Enterprises

After the publication of the paper ‘Keeping it in the Family – SME Family Business Succession’ that has been very well received by the European Commission, FEE Member Bodies and EU organisations from the SME field, FEE is delighted to release the new paper ‘Business Valuation: a guide for Small and Medium Sized Enterprises’ which is more guidance to assist with the transfer of a Small and Medium Sized Enterprise.

This guide describes the significant overall principles to be applied in the valuation of enterprises, especially in the case of valuing an SME.

The demand for business valuations may be divided into principally two areas: requirements for statutory rules or contractual agreements. There may be other reasons, dependant on the proprietors’ needs.

Valuations for contractual reasons occur particularly when partners join or leave a partnership, in relation to inheritance disputes and settlements, as well as for settlements made in accordance with family law. Business valuations are often used for entrepreneurial initiatives such as the purchase or sale of businesses, mergers, additions to equity or third-party capital, contributions of non-monetary assets (including the transfer of entire net assets of businesses), initial public offerings, management buy-outs or in connection with value-oriented management concepts.

Business valuations are also carried out based on commercial and tax law valuation questions.

When calculating a business value of small and medium-size entities, particular attention should be paid to determining precisely what makes up the business being valued, determination of management remuneration as part of valuation of the management factor, and the reliability of sources of information.

This guide is structured in a way that general principles for valuing a business are outlined and that specific matters arising for SMEs are explicitly referred to in the context of the relevant general principles.

Position Paper

 

Related content

EventEarly Warning Europe SME summit

30 September 2021

EventRoad to digital: How to support SMEs

16 June 2021

BlogSustainability risk management for SMEs: inaction is not an option

14 June 2021

UpdateSME Update

14 June 2021

Consultation responseFeedback statement: EU Taxonomy Article 8 Delegated act

3 June 2021

Stories from PracticeDigitalising the accountancy profession: what role for young professionals?

31 May 2021

Publication3-step sustainability assessment for SMEs

12 May 2021

PublicationAccountants – REACT now and help SMEs adapt to new VAT e-commerce rules

6 May 2021

EventFrom risks to resilience: benefits of intellectual property for your business

4 May 2021

NewsAccountancy Europe: Future-proofing tax to make it green, digital and fair

26 April 2021

UpdateSME Update

22 April 2021

EventFuture-proofing tax: make it green, digital, fair

15 April 2021

PublicationAudit exemption thresholds in Europe

9 April 2021

PublicationRoad to digital: what are the obstacles for SMEs and SMPs?

8 April 2021

NewsAccountancy Europe supports new EU plan to improve SMEs’ access to finance

26 March 2021

PodcastAccountants are the key for SME IP

19 March 2021

EventBridging expectations: what NFI from SMEs?

18 March 2021

InterviewRemoving barriers to support SMEs: the CMU initiative

11 March 2021

NewsSMEs count on us

11 March 2021

Consultation responseEC’s Consultation on a European Single Access Point (ESAP) for financial and non-financial information

8 March 2021

Sign up for our newsletter

* indicates required
Would you like to subscribe to our newsletter?
On which topics would you like to receive news?