Valuation Purposes: Why Businesses Order an Independent Valuation

The purpose of a valuation is the first thing an appraiser establishes — and the main factor that shapes everything that follows. The purpose determines the basis of value, the scope of procedures, the form of the report, and who will scrutinise it: an auditor, a lender, a court, the State Property Fund of Ukraine, or an international institution. That is why the purpose is fixed in the engagement contract as precisely as the asset itself.

Kanzas performs valuations in Ukraine for every purpose provided by law. Over 20+ years, the team has completed more than 5,000 valuations of every asset type for every purpose — for international owners, lenders and investors as well as Ukrainian businesses. Below is an overview of the main directions.

Transactions, tax and corporate events

The most common purpose is a transaction: valuation for sale-purchase and taxation substantiates the tax base and gives the parties a market benchmark. Specific corporate procedures carry their own valuation requirements: contributions to charter capital and investment, company liquidation, and squeeze-out — mandatory buyout of minority shareholders.

Financial reporting and regulators

Auditors and regulators require asset values supported by an independent report: IFRS valuation — fair value for financial statements, valuation for the securities regulator, and valuation for the Deposit Guarantee Fund — assets of insolvent banks. A separate direction is valuation for the State Property Fund of Ukraine and municipal enterprises: Kanzas is accredited by the Fund and included in its list of recommended valuers.

Lending and collateral

Lenders decide on the strength of the collateral, which makes valuation for lending one of the highest-volume purposes in our practice, alongside periodic collateral portfolio revaluation for existing loan books.

Litigation

Valuation for court proceedings gives a party documented evidence of asset value or the amount of damages in commercial, civil and corporate disputes. The report is built to withstand critical review by opposing experts.

War damage, losses and compensation

For businesses whose assets in Ukraine have been damaged or destroyed, a dedicated methodological framework applies: damage and loss assessment under Ukraine's official war-damage Methodology — from direct losses to lost profits and recovery needs, aligned with World Bank damage-assessment guidance. Non-war cases — fires, natural disasters, insurance events — are covered by damage assessment and lost profit valuation.

Foreign jurisdictions

Valuation for foreign jurisdictions — reports prepared with international valuation standards in mind and used by foreign tax authorities, auditors and courts. Many of our clients operate worldwide.

How the purpose determines the basis of value

The purpose links directly to the basis of value: market value for transactions and collateral; fair value for IFRS reporting; liquidation value for accelerated sales; replacement or reproduction cost for damage and insurance cases. An incorrectly chosen basis of value is the typical reason a report is rejected by an auditor or a lender, so we substantiate this choice at the engagement stage.

Questions and answers

Can one valuation report serve several purposes? No. The purpose is stated in the report, and the basis of value and assumptions are selected for it. A different purpose requires a new report or an update — otherwise the document will not be accepted by an auditor, lender or court.

Which basis of value will my report use? It follows from the purpose: market value for transactions and lending, fair value for IFRS, liquidation value for accelerated sales, replacement or reproduction cost for damages. The justification is part of the report.

How much does a valuation cost? We quote the fee and timeline after receiving the list of assets with their technical details and the purpose of the valuation: we assess the scope and agree a fixed fee and schedule before the contract is signed.

Write to us at [email protected] or message us in Telegram, Viber or WhatsApp — we reply with a scoped proposal, and all communication can be handled entirely in writing.

---

Related services: Valuation objects: full catalogue · Consulting and advisory services · Valuation report review