Expert Witness Journal Issue 68 August 2026 - Flipbook - Page 85
Lost in translation: appointing an
expert who will avoid international
business valuation pitfalls
by Neil Rudd, Associate Director in the Forensic Services Team at Crowe U.K. LLP.
regulatory risks rearing their ugly heads. Also,
because not all numbers are created equal, data
reliability must also be considered.
Introduction
In an increasingly globalised economy, business
valuations have developed a habit of refusing to
stay neatly within national borders, with valuers
having to navigate multiple jurisdictions, regulatory
frameworks and economic environments. While
the fundamental valuation methodologies remain
unchanged, the reality is that international
valuations introduce layers of complexity that can
turn what initially appears to be a walk in the park
into a hike through the woods.
For solicitors, these additional layers of complexity
mean that the choice of expert is particularly
important. Experience in domestic business
valuation does not necessarily equate to experience
in cross-border matters. An expert should be able to
identify jurisdiction-speci昀椀c risks, explain how they
have been addressed, and demonstrate where local
specialist input has been obtained where necessary.
This article explores the practical realities
of international and cross-border valuations,
highlighting issues that solicitors should consider
when selecting, instructing and assessing expert
valuation evidence. It examines key pitfalls to
avoid, highlighting how seemingly innocuous yet
inappropriate assumptions can undermine both the
valuation, an expert’s credibility and, in turn, the
weight given to expert evidence.
Market approach: when comparable
isn’t comparable
The market approach relies on identifying
comparable companies from which market
value information can be obtained. Such market
value information may be available because a
comparable company has been acquired or is listed
on an exchange with actively traded shares. This
process of identifying comparable companies may
appear straightforward, until you remember that
comparable across borders can mean anything from
“almost identical” to “shares the same planet”.
Same toolkit, more moving parts
The reassuring news is that valuers do not require
a completely new box of tools, with International
Valuation Standards setting out three principal
valuation approaches that are equally applicable in
both domestic and international arenas:
•
Market approach: Comparing the asset with an
identical or comparable asset for which price
information is available.
•
Income approach: Converting projected cash
昀氀ows to a single current value.
•
Cost approach: Using the economic principle
that a buyer will pay no more for an asset than
the cost to obtain an asset of equal utility.
One issue can be accounting consistency, as
comparable companies may prepare 昀椀nancial
statements under di昀昀erent accounting standards
(e.g. IFRS vs US GAAP ). Without appropriate
adjustments, the market value information derived
from information within the 昀椀nancial statements
can become misleading. This is a “don’t compare
apples with oranges” situation.
The question of whether market value information
is impacted by local risk conditions must also be
considered. Information derived from a stable,
developed market may look very appealing…right
up until it is applied to a business operating in a
jurisdiction where political stability is more of an
aspiration than a reality.
The less reassuring news is that everything around
these tools becomes more complicated. Stability
is not universal, with political, economic and
EXPERT WITNESS JOURNAL
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AUGUST 2026
