What is Asset-Based Valuation?
Asset-based valuation calculates your business worth by determining the fair market value of all assets minus liabilities. This includes tangible assets (property, equipment, inventory) and intangible assets (IP, goodwill, customer relationships). It's ideal for asset-heavy businesses and provides a clear floor value.
How Does Asset-Based Valuation Work?
Asset-based valuation calculates business worth by determining the fair market value of all assets minus liabilities. This approach provides a clear, tangible foundation for valuation based on what the business actually owns.
Our experts conduct thorough analysis of both tangible assets (real estate, equipment, inventory, vehicles) and intangible assets (intellectual property, patents, trademarks, customer relationships, and goodwill) to provide a complete picture of your company worth.
This method is particularly effective for asset-heavy businesses, holding companies, investment entities, and companies facing liquidation or restructuring scenarios.
From $3,500
Starting price
2-3 Weeks
Typical timeline
30-50 Pages
Report length
What Are the Key Benefits?
- Clear, tangible basis for valuation
- Establishes minimum company value (floor value)
- Ideal for asset-intensive industries
- Useful for merger and acquisition negotiations
- Comprehensive asset inventory included
- Identifies hidden value in underutilised assets
- ATO and court compliant methodology
Who Should Use This Method?
- Manufacturing and industrial businesses
- Property and real estate holding companies
- Businesses with significant equipment
- Liquidation or wind-up scenarios
- Investment and holding companies
- Businesses with valuable IP or patents
What Methodologies Do We Use?
Book Value Method
Calculates net asset value using book values from financial statements. Useful as a starting point but may not reflect current market values.
Adjusted Net Asset Method
Adjusts book values to fair market value, accounting for asset appreciation/depreciation, off-balance sheet items, and contingent liabilities. This is our preferred approach for most asset-based valuations.
Liquidation Value Method
Estimates value if assets were sold quickly (forced liquidation) or over a reasonable period (orderly liquidation). Used for distressed situations or as a floor value.
Replacement Cost Method
Calculates the cost to replace all assets with equivalent functionality. Useful for insurance purposes and specialised assets.
What's Included in Your Report?
Asset Inventory
- Complete tangible asset listing
- Intangible asset identification
- Asset condition assessment
- Useful life analysis
Valuation Analysis
- Fair market value adjustments
- Depreciation calculations
- Goodwill assessment
- Liability analysis
Documentation
- Executive summary
- Detailed methodology explanation
- Supporting schedules
- Valuer qualifications
Common Questions About Asset-Based Valuation
People Also Ask About Asset-Based Valuation
Book value is the historical cost minus depreciation recorded in financial statements. Market value is what assets would sell for today. Real estate, equipment, and inventory often have significant differences between book and current market values.
Goodwill is calculated as the difference between enterprise value (from income or market methods) and the fair value of identified tangible and intangible assets. It represents value from reputation, customer relationships, and competitive advantages.
Liquidation value assumes assets are sold quickly (forced) or over time (orderly), typically at discounts. Going concern value assumes continued operations with synergies between assets. Going concern is usually 20-50% higher than orderly liquidation.
Common methods include relief-from-royalty (what you'd pay to license the asset), excess earnings (income attributable to the asset), and cost-to-recreate. Patents, trademarks, customer lists, and proprietary technology each require specific approaches.
Asset-based valuation suits asset-heavy businesses (manufacturing, property), holding companies, liquidation scenarios, or as a floor value. It's also essential when intangible assets like IP are significant value drivers requiring separate identification.
Related Industry Valuations
Related Valuation Methods
Ready to Get Started?
Contact us for a free consultation to discuss your asset-based valuation needs and receive a custom quote.