The Adjusted Net Asset Value (NAV) Method is the business-level application of the Cost (Asset) Approach. It restates every asset and liability on the balance sheet, including those not recorded such as internally generated intangibles and contingent liabilities, to fair value. Equity value is the difference between the two.
When to Use the Adjusted NAV Method
- Holding and investment companies, whose value lies mainly in the assets they hold
- Property-holding and asset-intensive businesses, such as real estate, shipping and natural resources
- Early-stage or loss-making entities without reliable earnings
- Family office and investment portfolio reporting
- Shareholder disputes and tax valuations where an asset-based floor value is relevant
How the Method Works
- Start from a recent balance sheet at, or rolled forward to, the valuation date.
- Restate assets to fair value: property appraisals, the fair value of investments in subsidiaries and associates, receivables net of expected credit losses, inventory at net realisable value, and identifiable intangible assets.
- Restate liabilities: debt at market value, provisions, deferred tax and off-balance-sheet or contingent liabilities.
- Consider tax on revaluation gains, where relevant to the basis of value.
- Calculate the adjusted NAV: adjusted assets minus adjusted liabilities.
- Apply discounts or premiums: a holding-company discount, a discount for lack of marketability (DLOM) or a minority discount, depending on the interest being valued.
Strengths and Limitations
Strengths: the method is tangible, transparent and anchored to the balance sheet. Limitations: it may not capture goodwill and earning power in operating businesses, where income and market approaches are usually more appropriate.
Trusted by Public and Private Companies and Multinational Corporations
Valtech Valuation is an independent valuation and transaction advisory firm with offices in Hong Kong and Singapore. Public companies, private businesses and multinational corporations rely on our valuations for financial reporting, transactions, fundraising and disputes. Our clients range from Fortune 500 companies, listed groups and US-listed firms to private equity funds, family offices and high-growth startups, across Hong Kong, Mainland China, Singapore, Southeast Asia, the Middle East and the United States.
Why Appoint Valtech Valuation for Reliable International Valuation Services
- Independent and defensible conclusions: objective, well-documented reports prepared to withstand audit, regulatory and investor scrutiny.
- ISO 9001 certified quality management: a certified quality process for consistent, reliable results.
- Proven with listed and multinational clients: experience supporting publicly listed groups, US-listed firms and Fortune 500 companies.
- International reach, local expertise: offices in Hong Kong and Singapore serving clients across Asia, the Middle East and the United States.
- One team for every asset class: property, financial instruments, intangibles and businesses valued together.
- Multi-disciplinary qualified team: accounting, finance, risk management, surveying and business valuation professionals on every engagement.
Professional Credentials of Valtech's Team
- PhD holders
- Certified Public Accountants – CPA (HKICPA)
- Chartered Financial Analysts – CFA
- Financial Risk Managers – FRM (GARP)
- Chartered Valuation Surveyors – MRICS (Royal Institution of Chartered Surveyors)
- Accredited in Business Valuation – ABV (AICPA)
- Certified Valuation Analysts – CVA (Singapore)
- Certified Public Valuers – CPV (China Appraisal Society)
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