SECURITIES & FINANCIAL ASSETS VALUATION
Understanding the Value of Financial Assets
Securities and financial asset valuation involves assessing the characteristics, contractual terms, market context and other relevant factors affecting the value of a financial asset or security. The scope of the engagement depends on the nature of the asset, valuation purpose, relevant date and information available.
SECURITIES & FINANCIAL ASSETS VALUATION
VALUE DEPENDS ON
ASSET.
TERMS.
MARKET.
Understanding the instrument beyond its stated or contractual value.
A STRUCTURED APPROACH TO FINANCIAL ASSET VALUATION
Pensar Valuation considers the financial, contractual, market and other characteristics relevant to the asset and purpose of the engagement.
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Depending on the assignment, analysis may consider factors such as underlying assets or obligations, contractual terms, cash flows, market conditions, credit considerations, liquidity and relevant market evidence.
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Securities and financial asset valuation may support financial reporting, transactions, investments, regulatory requirements and other corporate or valuation purposes.
WHY FINANCIAL ASSET VALUATION MATTERS
When Is Securities & Financial Asset Valuation Required?
Securities and financial asset valuation may be required for financial reporting, transactions, investment decisions, regulatory requirements and other corporate purposes. The purpose of the engagement determines the scope, valuation date and analysis required.
FINANCIAL REPORTING
Valuation support for applicable fair value measurement and financial reporting requirements.
REGULATORY REQUIREMENTS
Supporting applicable regulatory, statutory and compliance-related valuation requirements.
TRANSACTIONS & TRANSFERS
Supporting acquisitions, disposals, transfers and other transactions involving securities or financial assets.
CORPORATE RESTRUCTURING
Valuation support for restructuring, reorganisation, ownership changes and other corporate matters.
INVESTMENT & PORTFOLIO DECISIONS
Providing valuation analysis to support investment, portfolio and related financial decisions.
OTHER CORPORATE REQUIREMENTS
Supporting other corporate transactions, structuring and financial requirements where an independent valuation is required.
The purpose of the valuation determines the relevant analysis.
The appropriate assessment depends on the characteristics of the asset, contractual terms, available information, valuation date and circumstances of the engagement.
Our Approach.
Our Securities & Financial Asset Valuation Process
Each securities and financial asset valuation engagement is shaped by the nature of the asset, its contractual characteristics, the purpose of the assignment and the information available. Our approach combines financial analysis, relevant market evidence and professional judgement to develop a reasoned valuation conclusion.
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DEFINE
UNDERSTAND
ANALYSE
VALUE
REPORT
Understand the requirement
Assess the instrument
Evaluate relevant value drivers
Apply appropriate valuation analysis
Document the valuation conclusion
Establish the valuation purpose, relevant valuation date, asset or security being valued and scope of the engagement.
Review the nature of the asset, contractual terms, cash flows, underlying characteristics and other relevant features.
Consider market conditions, credit considerations, liquidity, underlying assets or obligations and other relevant factors.
Consider relevant valuation approaches, assumptions, market evidence and other analysis appropriate to the asset and purpose.
Present the relevant methodology, assumptions, analysis and resulting conclusion in an appropriate report format.
VALUATION CONSIDERATIONS
Factors That Influence Securities & Financial Asset Value
The value of a security or financial asset can be influenced by a combination of contractual, financial, market and risk-related factors. The relevance of each consideration depends on the nature of the asset, its characteristics and the purpose of the valuation.
01
CONTRACTUAL TERMS
Terms governing the instrument, including rights, obligations, maturity, payment features and other relevant provisions.
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MARKET CONDITIONS
Interest rates, market conditions, comparable evidence, pricing information and other relevant market indicators.
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LIQUIDITY & MARKETABILITY
Trading activity, availability of market participants, liquidity and other factors affecting the ability to realise value.
02
CASH FLOWS & ECONOMIC BENEFITS
Expected cash flows, payment structures, economic benefits and assumptions relevant to the asset.
04
CREDIT & COUNTERPARTY RISK
Credit quality, counterparty characteristics, default considerations and other risks that may affect expected cash flows.
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UNDERLYING ASSET OR OBLIGATION
Where relevant, the characteristics and performance of underlying assets, liabilities, obligations or reference interests.
Financial asset value is influenced by more than its face or stated value.
The relevant contractual, financial, market and risk factors are considered in the context of the valuation purpose and available information.
VALUATION DELIVERABLES
What a Securities & Financial Asset Valuation Report Covers
A securities and financial asset valuation report sets out the relevant asset information, scope of the engagement, valuation analysis, assumptions and resulting conclusion in a structured format appropriate to the purpose of the assignment.
01
ASSET & SCOPE
Defining what is being valued
Identification of the security or financial asset, relevant characteristics, valuation purpose, valuation date and scope of the engagement.
03
VALUATION ANALYSIS
Applying the appropriate analysis
Relevant market evidence, assumptions, calculations and valuation analysis appropriate to the asset and purpose.
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CONTRACTUAL & FINANCIAL ANALYSIS
Assessing relevant characteristics
Relevant contractual terms, cash flows, underlying interests, financial information and other factors considered in the assignment.
04
CONCLUSION & REPORTING
Presenting the valuation conclusion
A structured presentation of the methodology, key assumptions, analysis and resulting conclusion of value.
Clear analysis. Reasoned conclusion. Appropriate reporting.
The scope and level of detail of the report depend on the nature of the asset, purpose and circumstances of the engagement.
