Welcome to the EOFY 2023 edition of MW Insights. As one chapter closes, another opens, and no doubt we all live our lives one financial year at a time!
This year has seen many changes at Munday Wilkinson as well as the economy generally. Anecdotally, there appears to be more businesses requiring our services for the quantification of losses, and as more pressure is put on the economy and people, we suspect this trend may continue for some time yet.
A quick reminder of our services on offer:
- Business, Share & Other Equity Valuations.
- Economic Loss Assessments for commercial disputes.
- Loss of Earnings Assessments for personal injury.
- Family Law – Investigations and Single Expert Reports.
- Financial and Fraud Investigations.
- Compulsory acquisitions; and
- Expert Witness Services.
As the financial year has come to an end, many businesses are busy focusing on the year ahead. The last thing on their mind is preparing their financial statements or tax returns, especially considering many tax returns will not be due for lodgement until 31 October 2023 at the earliest (or 15 May 2024 for those with an existing tax agent and no abnormal conditions).
For a business valuation we generally rely on the latest available financial statements rather than any draft management accounts as these often lack year-end adjustments (including depreciation, allocation of hire purchase interest, or removal of personal expenditure to loan accounts etc, and are otherwise open to opportunities for manipulating the reporting).
You can probably see the issues this can cause.
Whilst parties may be hesitant to prepare their documents, it is generally beneficial to do so and can save requiring an updated valuation later. Remember: A tax return prepared early does not need to be lodged early, so there are no issues with drafting them early (only potential benefits!). At a minimum, reviewing the management accounts and entering any year end adjustments is a reasonable option as, whilst they may be draft, they are more likely to be reliable drafts.
If a party you represent has an interest in a business and you expect a business valuation may be required, then please consider recommending to your clients that they reach out to their accountant sooner rather than later. Their accountant may also be busy so the sooner contact is made then the sooner a timeline can be established, and all parties’ expectations can be adjusted accordingly.
As always, you can reach out at any time (03) 9816 9122 or email us at firstname.lastname@example.org if you require our assistance or want to talk Business Valuations and Forensic Accounting.
Joshua, Victoria, and Russell