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When can I use a Net Tangible Asset (NTA) valuation to value my Employee Share Scheme?

In order to be eligible for a Net Tangible Asset (NTA) Book Valuation, companies must meet the following criteria

If companies do not meet the eligibility criteria for an NTA Book Valuation, they can elect to use an alternate approved valuation method.  Officially, this requires a written directors resolution as to the method used and the resultant value.

The alternate method has to be in writing and fully documented, taking into account the following on a reasonable basis:

(i)     the value of tangible and intangible assets of the company;

(ii)    the present value of anticipated future cash flows;

(iii)   the market value of similar businesses, including the use of earnings multiples;

(iv)   uplifts and discounts for control premiums, lack of marketability and key person risk

Our Startup Valuation considers these aspects.