Energy sector valuations: Considering sector outlook
When valuing a company, it’s tempting to focus on the business itself – eg. its revenues, its margins, its growth plans Yet in many sectors, you cannot look at this in isolation. A more relevant question is often: What is happening to the sector around it? I.e. How is it evolving structurally? How are demand […]
What did you actually buy? A €10m heat pump acquisition unpacked using PPA
You’ve acquired a business for €10 million. The deal is done — but your financial statements don’t yet reflect what you’ve actually bought. Under IFRS 3, you are required to translate that purchase price into identifiable assets, liabilities and goodwill. This is not just a compliance exercise — it is a structured process to ensure […]
Dealing with wars and other exogenous shocks: Number distortions & firm valuations
Major external shocks can leave clear marks on corporate financials, making valuations significantly more challenging. This becomes particularly difficult when such shocks are not purely one-off events, but may reasonably recur in the future. Recent geopolitical developments in the Middle East illustrate this issue. Armed conflict, such as the current war involving Iran, has the […]
The “Green Knife”: Identifying Sustainability Value Drivers Within a Company
Very few companies are purely “green” or purely “brown”.Most businesses operate across a mix of sustainable, transitional and legacy activities. This creates a fundamental strategic question for boards and investors: Which parts of the business actually create long-term sustainable value? And how much of the firm’s enterprise value is driven by those activities? Traditional valuation […]
A Valentine’s Case Study: Setting a Defensible Share Transfer Price
This Valentine’s Day, we look at parental love: a family-owned services company transferring shares from one generation to the next. The question is not lovey-dovey, but practical: How do you set a defensible transfer price that auditors and tax authorities are comfortable signing off on? Unlike a strategic M&A transaction, this requires a focused valuation […]
Impairment testing case study: A construction SME under margin pressure
Impairment testing requires careful professional judgement. As this case study highlights, when assessing the value of potentially impaired assets, the devil is in the detail. Using a construction SME, we guide you through the key steps required to apply a value-in-use (VIU) approach under IAS 36 / FRS 102. Introducing Construction BV This stylised case […]
How ESG-focused fund managers improve the price discovery process
While fund managers’ ESG considerations are often considered a “labelling” exercise, a recent paper in the Journal of Banking and Finance suggests it can actually help the price discovery process. And, in doing so, improve the cost of capital for greener companies. What the Study Looks At The paper by Avramov et al. (2026) studies […]
The Intersection: Five Practical Steps to Integrate Sustainability into AIF Valuations
How ESG risk is becoming an AIF valuation variable Valuation teams across Europe are realising that sustainability risk is no longer a disclosure topic — it’s a fair-value issue. Under AIFMD and the EU’s sustainable-finance framework, fund managers must now demonstrate that material environmental, social, or governance (ESG) factors are reflected not just in policies, […]
Carbon emissions & Valuations
How can company valuations incorporate carbon emissions?A seminal paper by Bolton and Kacperczyk (2021), Do Investors Care About Carbon Risk?, offers valuable guidance. The authors examine stock returns in relation to firms’ Scope 1, 2, and 3 emissions, with two notable findings. 1. Absolute emissions matter to equity investorsHigher levels of Scope 1, 2, and […]
Machine learning on ESG & corporate valuation
Academic research into sustainability drivers of corporate valuation is increasingly moving into the field of machine learning.A recent paper by Turkish researcher Murat Doğan and colleagues is a good example. It concludes that: The authors’ preferred approach, the Random Forest Model, produces predictions on the relative importance of different factors, illustrated in the accompanying pie […]