What makes a valuation report defensible

Defensibility starts with independence

An independent valuation report is not prepared by the company's usual accountant, but by a certified accountant or a company auditor who is not the professional ordinarily responsible for the company's books. This separation exists precisely so that the resulting figure is not seen as produced by someone with an ongoing relationship or interest in a particular outcome.

This structural independence is a starting point, not a guarantee on its own. A report can be prepared by an independent professional and still lack the documentation needed to withstand later scrutiny, which is why independence and thoroughness are both necessary.

Every figure should be traceable to a source

A defensible report clearly identifies where each input figure comes from, whether it is equity and EBITDA taken from filed annual accounts, a comparable company multiple drawn from a specific dataset, or a discount rate built from stated components. A reader should be able to follow the chain from source document to final figure without guesswork.

This includes documenting the annual accounts and shareholders register used, the years covered, and any additional information obtained directly from the company, such as management accounts or explanations for unusual items in a given year.

Adjustments need explicit reasoning

Where earnings are normalised, where director remuneration is adjusted to market terms, or where a discount is applied for a minority stake, the report should state the adjustment, the reason for it, and how its size was determined, rather than presenting only the resulting adjusted figure. A reader should be able to see what was changed and why.

Ter illustratie, an adjustment described only as a normalisation of results, without identifying which specific line item was affected or why, is harder to assess than one that references a specific cost in a specific year, tied to a specific event.

Cross-checking methods strengthens the conclusion

A report that applies a single method to reach its conclusion is more exposed to the weaknesses of that particular method. Applying more than one recognised approach, such as discounted cash flow analysis alongside a multiples-based method, and explaining how the results compare, gives a reviewer confidence that the conclusion is not an artefact of one method's assumptions.

Where the two methods diverge meaningfully, a defensible report explains why, rather than silently favouring the more favourable result without discussion.

Consistency with the reference date and the company's actual position

Since the report is prepared for the 31.12.2025 reference date, all figures, adjustments and comparisons should be anchored to information available and relevant as of that date, rather than reflecting a later period without explanation. A report that mixes information from different periods without clarifying the timeline invites questions later.

Reviewing a draft report before it is finalised

Reading a draft report closely, checking that the underlying accounts and register match what was provided, and asking for clarification on any adjustment that is not fully explained, is a reasonable step before a report is finalised, since it is the shareholder who will rely on it if the figures are ever questioned.