Business Valuation (Warranted vs True Position)
Independent valuation of the business under warranted and true financial positions for warranty claim quantum.
Business valuation is the final step in warranty claim quantification. The expert values the target under the warranted financial position and the true financial position, with the difference representing diminution in value.
Valuation methodology depends on the nature of the business and available data. Common approaches include earnings multiples, discounted cash flow, and transaction comparables. Instructions must use standard market value definitions.
Inspired Education v Crombie [2025] is a critical warning: valuation expert evidence was fatally undermined where instructions were inconsistent with commonly used definitions of market value.
Methodology
- Select appropriate valuation methodology
- Apply market value definitions consistently
- Value under warranted and true scenarios
- Calculate diminution in value
Frequently Asked Questions
What valuation methodology is used in warranty claims?
Why do valuation instructions matter so much?
Can the same expert value and quantify accounting adjustments?
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