In: Finance
All of the following is always true about valuation date EXCEPT:
a. | The valuation date is the same as the date of the valuation report produced | |
b. | The valuation date should be specifically defined at the time of engagement | |
c. | Only information that is known or knowable as of the specific valuation date should be incorporated into a business valuation | |
d. | It is generally easiest if the valuation date coincides with the date of the company’s reported financial statements |
Answer : a. The valuation date is the same as the date of the valuation report produced
The statement (a) is NOT TRUE
a) The valuation date is the date on which the estimate of value is applicable. It can be different from the date of the valuation report produced or the date on which the investigation is conducted or completed. The given statement is NOT TRUE.
b) The valuations are done at a particular point of time. There will be a specific date at which the valuer estimates the subject's value. It is specifically defined at the time of engagement. The given statement is TRUE.
c) The valuation date is a cut off date for the information to be used for estimating the value. The value should be based only on the information which is already known at the valuation date. The given statement is TRUE.
d) The process of calendarization is done to coincide the valuation date with the date of the company’s reported financial statements. The reporting time periods of financial statements is standardised. This will help to make the comparison fair and easy. The given statement is TRUE.