Valuation of Pharmaceutical Company
Valtech’s valuation team has recently completed a business valuation of a pharmaceutical company’s cash generating unit.
The subject of valuation is principally engaged in developing and selling generic drugs. These types of pharmaceutical companies normally involve a significant amount of initial capital investment for their research and development (R&D). The R&D expenditure may be capitalized as an intangible asset on book. Under HKAS 36, impairment testing for intangible assets will be required for their financial reporting purpose.
For impairment testing, the income approach is normally adopted to calculate the value in use of the cash generating unit. It involves high uncertainty in discounted cash flow analysis especially for pre-revenue stage new drugs. We have thorough discussion with client and auditor in this case to ensure that all material assumptions in the financial forecast are supported by detailed market analysis and research. All supporting information is well documented in our model and report delivered to the client.
About Valtech Valuation
Valtech Valuation is a professional valuation firm accredited with ISO-9001 in valuation advisory services. The firm is renowned for its expertise in advanced valuation techniques, customized valuation models, data-driven insights, and adherence to compliance and reporting standards. The firm has a solid track record in valuation advisory for listed companies, private equity, fund managers, and financial institutions. Valtech’s qualified team comprises members with PhDs, CPA (HKICPA), CFA, Chartered Valuation Surveyors of the Royal Institution of Chartered Surveyors, and valuers accredited with Business Valuation (ABV) by AICPA and CVA qualifications in Singapore. Valtech continues to expand into more markets by leveraging its valuation platform and recruiting local experts.
