Who can value a business | Business Appraisal

iThe standard

APES 225 and who it binds

The Accounting Professional & Ethical Standards Board issues standards for professional accountants. Three professional bodies make them compulsory for their members: CPA Australia, the Institute of Public Accountants, and Chartered Accountants Australia and New Zealand. Each body enforces the standards for its own members and disciplines breaches.

APES 225 Valuation Services covers members whenever they estimate the value of a business, an interest in one, a security, an intangible or another asset or liability, whether the work is for a client or for their own employer. The current version is effective for valuation services starting on or after 1 January 2025. Two guidance notes sit beside it: APES GN 20 on the scope and extent of work, and APES GN 21 on valuations for financial reporting.

Read it at the source: APESB’s valuation services page, which links the standard itself.

iiThree kinds

Three kinds of valuation service, compared

The three differ in how free the valuer is to choose how the work is done.

A summary in our words of the definitions in section 2 of APES 225 (2024).
Kind	How the work is set	What it produces
Valuation Engagement	The valuer chooses how to do the work, using whatever a reasonable, informed third party would expect for the case.	A “Conclusion of Value”
Limited Scope Valuation Engagement	Something restricts the work, from the client or from circumstances, enough that it could materially change the estimate. The standard notes it may also be called a “restricted scope” or “indicative” engagement.	A “Conclusion of Value”
Calculation Engagement	The valuer and the client (or employer) settle in advance which approaches and methods will be used, and the work is usually lighter than a full valuation.	A “Calculated Value”

A full valuation turns into a limited scope one if a restriction of that kind comes to light partway through (section 2). Under paragraph 5.2, a limited scope or calculation report has to warn that a full valuation might have reached a different result.

iiiThe report

What a written report must communicate

Paragraph 5.2 of APES 225 sets out what a written report from a member in public practice must make clear. In summary:

Who and why: who asked for the valuation, its purpose, and who did it, with their qualifications.
What and when: what was valued, the date the value applies to and the date of the report.
On what basis: the scope and any limits on it, the standard and premise of value (going concern or liquidation, for example), and whether the valuer acted with independence.
How: the approaches and methods used, the information relied on and how far it was reviewed, and the key assumptions.
The answer: the resulting value, any qualifications that materially affect it, and a statement that APES 225 was followed.

The standard itself, linked from APESB’s valuation services page, has the full list.

ivThe ATO’s view

How the ATO looks at the person behind a valuation

The ATO says a reasonable estimate of market value takes skill, knowledge and experience, and that a report prepared by a suitably qualified professional following commonly accepted standards and codes of conduct is considered more reliable. It suggests checking that a valuer holds the certifications needed and has experience with the kind of asset being valued.

Some assets inside a business have their own rules. A real property valuer is someone registered or licensed under state, territory or Commonwealth law; Queensland requires registration with its Valuers Registration Board, and Western Australia requires land valuations to be carried out by a licensed land valuer. The ATO also notes that a market valuation for the GST margin scheme must be done by a professional valuer.

For the business itself, the ATO points to the International Valuation Standards and to additional standards such as APES 225, and says it will accept valuations that comply with these codes.