Check whether the positions value the same interest
Identify the entity, share class, number of shares, valuation date and purpose in each position. Confirm the basis and any contractual instructions. Two figures cannot be compared meaningfully if one concerns the whole company and the other a defined holding with different rights.
Ask legal advisers to clarify disputed documents or appointment terms. A financial adviser should not silently select a legal interpretation that determines the outcome. Record the instruction relied on or agree how clearly labelled alternatives will be considered.
Use a common financial starting point
Place the accounts and management figures used by each side alongside one another. Reconcile periods, group boundaries and material accounting differences. Separate a correction to the records from an adjustment intended to describe maintainable earnings.
Identify whether one analysis includes information unavailable to the other. A discrepancy may be an access problem rather than a technical disagreement. Keep the source and version for every material schedule so the discussion can return to evidence.
Reconcile earnings adjustments line by line
An original hypothetical example starts with £220,000 EBITDA. Position A adds £40,000 owner pay without a replacement allowance and reaches £260,000. Position B allows a £55,000 replacement cost and reaches £205,000 before other adjustments. The £55,000 difference concerns the operating model, not multiplication.
Investigate the role, evidence and assumptions behind that difference. Neither position becomes correct merely because it produces the preferred result. Present agreed facts, disputed judgement and further information needed in separate columns of the working schedule.
Keep the value bridge and share rights visible
Compare debt, cash, working capital and other adjustments using consistent dates and definitions. A difference described as a multiple disagreement may partly arise after operating value is calculated. Trace the bridge rather than comparing only headline equity figures.
For a particular holding, identify how the actual rights and agreed basis are treated. Do not assume a standard minority discount or automatic pro-rata approach applies to every situation. Contractual and legal context may require specific instructions.
Use scenarios to explain, not conceal, disagreement
Where an assumption remains unresolved, a scoped sensitivity can show its effect. Keep the principal conclusion and its basis clear. A very wide range is not a substitute for deciding which assumptions are supportable under the instructions.
Avoid combining one side’s optimistic earnings with the other side’s most favourable risk input without explanation. An internally consistent scenario should tell a coherent story. Record which questions need factual evidence, professional judgement or legal determination.
Build a neutral difference schedule
For each material difference, state both positions in comparable terms and identify the evidence needed to assess them. Do not label a disagreement as an error before the underlying question is clear. A neutral schedule can narrow the work required, even where it does not bring the parties to agreement.
| Area | Evidence to examine | Question to resolve |
|---|---|---|
| Instructions | Subject, date, basis and legal assumptions | Are the analyses answering the same question? |
| Evidence | Financial source, period and access | Would a common record resolve the difference? |
| Judgement | Operating case, adjustment and value effect | What professional or legal issue still requires resolution? |
Agree the role of any further adviser
A second opinion, fresh valuation, joint appointment and expert witness role are different assignments. Clarify scope, conflicts, access, intended users and process before sharing reports. Check permissions and confidentiality obligations.
Consult EFC can discuss a suitable valuation or scoped reconciliation subject to acceptance. An initial enquiry does not appoint an expert witness or create a binding determination. The purpose is an explainable financial analysis that fits the instructions, without promising that parties or a court will accept a particular conclusion.
Your preparation checklist
- Compare subject, date, basis and legal instructions first.
- Reconcile the financial starting points and versions.
- Separate agreed facts from disputed assumptions.
- Trace operating value, equity adjustments and share rights.
Frequently asked questions
Why do two valuations differ so much?
They may use different instructions, evidence, earnings adjustments or judgement. Reconcile the inputs before assuming the difference is an error.
Should a minority discount always apply?
No universal rule fits every assignment. The rights, basis, relevant documents and legal instructions need consideration.
Does a second opinion settle the dispute?
Not necessarily. Its role and any binding effect depend on the appointment, agreements and legal process, which should be clarified separately.
Sources and scope
This is general preparation guidance. Worked examples are original hypothetical illustrations, not client outcomes, market multiples or individual advice. Agree the purpose, evidence and scope before commissioning professional work.
Professional background: ICAEW business and share valuation resources and IVSC standards overview. These links provide context and do not imply endorsement, assurance or compliance for an individual engagement.
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Tell us the decision, approximate timing and the information available. We will discuss suitability, scope and fees before work begins. Please arrange a suitable channel before sharing confidential documents.