6 Methods of Valuing Enterprises Applicable from 2018

Duy Thinh

18:39, 10/07/2024

Circular 122/2017/TT-BTC of the Ministry of Finance promulgates the Vietnam Valuation Standard No. 12 – Business Valuation Standard.

Effective from January 01, 2018, individuals and organizations operating in the field of valuation may conduct enterprise valuation using the following six methods:

- Ratio method;- Transaction price method;- Asset method;- Discounted cash flow method (Free Cash Flow to Firm);- Discounted dividend method;- Discounted cash flow to equity method.

Note, the final result of enterprise value can be determined through the weighted average calculation of the results obtained by the applied valuation methods.

Besides the regulations on the above methods, Annex Example attached to Circular 122 illustrates the application of enterprise valuation methods.

For more details, see Circular 122/2017/TT-BTC effective from January 01, 2018.

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