IVS 200: Valuing Businesses and Business Interests in Family Law Disputes
- DB Forensic
- Mar 18
- 3 min read
Updated: Apr 15
When a couple separates and a business forms part of the asset pool, determining its true value becomes a critical step in reaching a fair property settlement. For many families, the business may represent years of effort, income security, and future financial stability.
However, valuing a business is rarely straightforward. Questions quickly arise. Is the valuation based on the whole business or only a shareholding? Does the interest represent control? Are there non-operating assets included in the business structure?
This is where IVS 200: Businesses and Business Interests becomes important. This international valuation standard provides guidance on how valuers analyse and determine the value of businesses and ownership interests in a consistent and transparent way.
Understanding IVS 200
IVS 200 focuses specifically on the valuation of businesses and ownership interests, including shares or partial interests in a company. It builds on the general valuation framework established in earlier standards and provides detailed guidance on how businesses should be analysed and valued.
A business is generally defined as an integrated collection of assets and liabilities working together to generate economic activity. This means the value of the business often exceeds the sum of its individual assets because of factors such as goodwill, systems, reputation, and established operations.
Businesses can take many forms including corporations, partnerships, joint ventures, or sole trader operations. Even a specific division or segment of a business may need to be valued depending on the circumstances of the dispute.
Types of Business Interests That May Be Valued
In family law matters, it is common for the Court to require a valuation of a specific interest in a business, rather than the entire company.
IVS 200 explains that the valuer must clearly identify what exactly is being valued. This may include:
The entire business
A shareholding or equity interest
A controlling interest in a company
A minority or non-controlling interest
A particular business division or activity
The valuer must also define the type of value being assessed, such as enterprise value, equity value, or operating value. These distinctions can significantly impact the final valuation outcome.
Valuation Approaches Used for Businesses
IVS 200 confirms that the three primary valuation approaches may be used when valuing a business:
Market Approach
This approach compares the business to similar businesses that have been sold or are publicly traded.
Income Approach
This method estimates the value based on the future income or cash flow the business is expected to generate.
Cost Approach
This approach is less commonly used for operating businesses but may apply to early stage businesses, holding companies, or liquidation scenarios.
The appropriate approach depends on the nature of the business, the available data, and the purpose of the valuation.
Key Factors Considered in Business Valuations
IVS 200 highlights several important areas that must be carefully analysed when valuing a business.
These include:
Ownership rights
Legal documents such as shareholder agreements and partnership agreements may affect the value of a business interest.
Business information
Financial statements, management accounts, forecasts, and operational data are essential for a reliable valuation.
Economic and industry conditions
The performance of the broader industry and economic environment can influence business value.
Operating vs non-operating assets
Some assets may not contribute to the core operations of the business and may need to be treated separately.
Capital structure
Debt levels and financing arrangements can affect the final equity value of a business.
Each of these factors can materially impact the outcome of a business valuation in a family law dispute.
The Role of Forensic Accounting
In family law matters, business valuations must withstand scrutiny from lawyers, mediators, and the Court. A poorly prepared valuation can delay proceedings or lead to disputes between experts.
DB Forensic specialises in preparing independent and court-ready business valuations that comply with international valuation standards, including IVS 200.
Our forensic accounting team works closely with family lawyers and clients to:
Analyse business financial records and management reports
Identify the correct ownership interest to be valued
Apply appropriate valuation methodologies
Assess goodwill, operating assets, and business risks
Prepare clear and defensible expert reports for court proceedings
By following recognised standards such as IVS 200, DB Forensic ensures that business valuations are robust, transparent, and reliable.
Need a Business Valuation for a Family Law Matter?
Business interests can be one of the most complex assets in a property settlement. Obtaining an independent and professionally prepared valuation can provide clarity and help resolve disputes more efficiently.
If you need assistance with a business valuation in a family law matter, the forensic accounting team at DB Forensic can help.
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