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Fairness Opinion

Fairness opinions involve the provision of a report, generally to a Board of Directors, deliberating the purchase or sale of assets or business interests. There is usually a presumption that the Board of Directors will rely on the fairness opinion in reaching its conclusions on proceeding with or completing a transaction. There is also a presumption that other third parties would need to have access to the fairness opinion or that the reference to the fairness opinion report may be needed in publications or filings available to the general public.

Fair Value Studies

“Fair value” type reports include a broad category of valuation-based services usually provided in connection with requirements arising during the purchase, sale or transfer of assets or interests or as a result of contractual, governmental, regulatory, or statutory requirements such as disclosures in financial statements as stipulated by International Accounting Standards Board (IASB). As a result, assets and liabilities need to be analyzed from a fair value perspective.

These services include:

Valuation analyses or estimates of value required in connection with articles of association, by-laws, or other forms of shareholders’ agreements
Estimates of value required under contracts between parties or resulting from disputes between parties
Valuation analyses related to tax mitigation and/or planning,
Preparation of estimates, analyses, and reports concerning the matter of tax, financial, or accounting solvency frequently involving either “balance sheet” tests on the value of assets (Impairment testing studies, valuation of investments, derivatives securities and inventories)
Adequacy of consideration, for example, “contribution-in-kind” paid or received, in connection with a specific transaction or event.

Valuation services provided in connection with fair value studies and fairness opinions generally are based on legal or statutory requirements and may involve unique or nonstandard valuation procedures and/or definition of the standard of value measurements. Services provided in connection with these types of requirements involve specialized knowledge and experience.

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