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to businesses with a significant amount of tangible assets; for example, a stable, asset-rich property or manufacturing business. The method does not however take account of future earnings and is based on the sum of assets less liabilities. The starting point for the valuation is the assets per the accounts, which will then be adjusted to reflect current market rates.

Industry rules of thumb: Where buying and selling a business is common, certain industry-wide rules of thumb may develop. For example, the number of outlets for an estate agency business or recurring fees for an accountancy practice.

There are a number of other factors to be considered during the valuation process. These may help to greatly enhance, or unfortunately reduce, the value of a business depending upon their significance. A few areas to consider: · Growth potential of the business · External factors, such as state of the economy, the market the business operates in

· Intangible assets–Business valuations may need to consider the effect of intangible assets as they can be a significant factor. Jim Doyle ACMA QFA is a partner in RDA Accountants, offering full accountancy, business advisory, tax advisory and financial services | 5 Upper George Street, Wexford | Louisville House, Waterford Road, Kilkenny | | www.rda.ie RDA Wealth Ltd trading as RDA Accountants is regulated by the Central Bank of Ireland

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