Rising demand for business valuers

SINGAPORE - The science of business valuation may sound rather dry and dull, but demand for this specialised skill is on the rise here.

The main drivers for this growing demand are mergers and acquisitions and international arbitration, Senior Minister of State for Finance and Transport Josephine Teo said on Monday.

She was speaking as a guest of honour at the inaugural Business Valuation Conference held at Marina Bay Sands.

Ms Teo noted that Singapore companies made 90 acquisition bids last year, valued at US$17.4 billion (S$22 billion), a 74 per cent jump in the value of outbound acquisition bids in 2012. That made Singapore the most active bidder among South-east Asian countries, she said.

Ms Teo also emphasised Singapore's strengthening position as an international arbitration hub and the growing need for business valuation professionals to provide expert testimonies to assist the courts and arbitration tribunals.

"The Singapore International Arbitration Centre handled 259 new cases last year, with total sums in dispute of $6 billion. This represented a 10 per cent increase in volume over 2012," she said. She spoke at the start of the two-day event attended by more than 300 local and international professionals interested in business valuation.

The event was organised by the Institute of Valuers and Appraisers of Singapore (Ivas) and sought to highlight various aspects of business valuation and fair value accounting through a series of panel discussions and conferences.

A separate study, released by the business valuation professional body, in collaboration with accounting giant EY, also sees a bright future for business valuers.

The study found that mergers, acquisitions and disposals as well as financial reporting are the top growth areas for the valuation industry in Singapore over the next few years.

Of the 249 Singaporean companies surveyed between November last year and January this year, 78 per cent believed mergers, acquisitions and disposals will be a key growth area, while 70 per cent said the same of financial reporting.

Only 25 per cent of the respondents believed litigation would be the top growth area for valuation services.

The study also showed that valuation services were carried out most frequently for financial reporting purposes, with 81 per cent of respondents performing at least one financial reporting valuation per year.

Ivas chief executive Eric Teo said in an interview yesterday that this is a result of a shift towards introducing fair value accounting into financial reports since the mid-2000s.

Business valuations for transactions, including mergers and acquisitions, were performed by 70 per cent of those surveyed, while litigation or dispute resolution valuations, in contrast, were performed only occasionally - 94 per cent of them do not perform more than three such valuations a year.

- See more at: http://business.asiaone.com/news/rising-demand-business-valuers#sthash.TVCj3pSm.dpuf