What makes a valuation defensible

A valuation is an opinion about value. What makes it defensible is not the confidence with which it is stated, but the structure underneath it — and the willingness of a qualified person to put their name to it.

Method, stated before the number

A defensible valuation names its basis before it produces a figure. Market value, fair value, and the other defined standards each answer a slightly different question, and the answer moves with the basis chosen. It then applies a method that suits the business: capitalisation of maintainable earnings where earnings are stable and visible, a discounted cash flow where they are not, or a net asset approach where the value genuinely sits in what the business owns. The method is disclosed, the inputs are disclosed, and the arithmetic can be followed line by line.

Inputs that come from the business, not from the answer

The easiest way to produce a number is to work backwards from the number you want. The most common way a valuation fails is when its inputs cannot be traced back to the business's own records. Every adjustment needs a reason that survives scrutiny: why this owner benefit is added back, why that related-party rent is normalised to market, why the last two years should carry more weight than the five before them.

Good working papers do not make a valuation more conservative or more aggressive. They make it checkable — which is the only property that matters when someone with an interest in a different answer starts reading.

Independence is the whole point

A valuation prepared by someone with a stake in the outcome is a negotiating position wearing a report's clothing. Independence means the valuer has no interest in the number beyond getting it right, and it is what allows a valuation to be used against the person who commissioned it: by a revenue authority, by a court, by a business partner who disagrees.

The signature

The final element is the one that cannot be automated. A named, qualified valuer reviews the work, tests the assumptions, and signs the conclusion. That signature transfers responsibility: someone qualified has staked their professional standing on this number being reasonable. It is what turns a calculation into a record.

It is also why we build the way we do. Assembly — collecting data, standardising the analysis, checking the arithmetic — can and should be systematic. Judgement cannot. Our process automates the former so that valuer time goes where it changes the outcome: into the assumptions, the comparables and the conclusion.

If you are weighing a free apportionment formula against a signed valuation, the honest answer is that both have their place. The free indicative range will tell you which one your business actually needs.