Business Valuation and Divorce Business Valuation in Halifax, Nova Scotia

Court-Accepted, Case-Law-Backed Business Valuations in Halifax

Eric Jordan, CPPA - International Business Valuation Specialist

Identification and Valuation of Intangible Assets

Regarding the Identification, Transferability, and Valuation of Intangible Assets in Divorce Proceedings

The following independent global institutions provide the empirical foundation for the 68% Intangible Asset Midpoint used in this forensic business valuation for divorce. These authorities confirm two critical realities:

  • Intangible assets now represent the majority of business value.
  • That value is conditional and may or may not survive separation from the operating spouse.

Legacy accounting models (Market, Asset, and Income approaches) systematically fail not only to identify intangible assets, but also to test whether those assets are transferable, durable, or divisible in a divorce context.

Global Empirical Authorities

The World Bank Group

  • In high-income OECD economies, intangible capital accounts for approximately 70%–80% of total economic wealth.
  • This includes human capital, institutional knowledge, operational systems, trust networks, and organizational continuity.
  • In divorce, this establishes that the majority of business value is not physical.
  • The critical legal question becomes whether intangible value belongs to the business entity or to the individual spouse.
  • Valuations that assume all intangibles are divisible overstate value; valuations that ignore intangibles entirely understate value.

McKinsey Global Institute (MGI)

  • Since the 1990s, investment in intangible assets such as software, intellectual property, data, and proprietary processes has grown more than three times faster than investment in physical assets.
  • This supports the weighting of proprietary systems and intellectual property in valuation.
  • However, if these systems reside in the mind, relationships, or personal execution of the operating spouse, they may not be transferable.
  • In such cases, intangible value may collapse upon separation, leaving only tangible or liquidation value.

UBS / Credit Suisse Global Wealth Reports

  • Global asset value now exceeds USD $500 trillion, with increasing reliance on intangible networks of trust, customer loyalty, and experiential continuity.
  • Customer trust must be classified as either institutional or personal.
  • Only institutional trust, attached to the business entity, is divisible marital property.

Organisation for Economic Co-operation and Development (OECD)

  • Knowledge-Based Capital (KBC) is identified as the primary driver of modern productivity.
  • Traditional financial statements hardly detect organizational or reputational assets.
  • This creates a methodological obligation for divorce valuation to use forensic techniques capable of identifying, testing, and stress-testing intangible assets.
  • Such testing must include whether intangible value survives the hypothetical exit of the operating spouse.

Appendix: Glossary of Forensic Valuation Terms

Divorce-Specific (2026)

Knowledge-Based Capital (KBC)

  • Intangible assets that generate future economic benefit without physical embodiment.
  • May be enterprise-based (divisible) or personally embedded (non-divisible).
  • Distinguishing between the two is essential to equitable division.

Stranded Assets (Assets-at-Risk)

  • Assets that lose value when separated from the operating ecosystem that sustains them.
  • If the operating spouse exits and the business cannot function independently, assets may become stranded and reduce the business to liquidation value.

Operating Spirit (Going-Concern Core)

  • The functional DNA of a business, including systems, processes, and customer trust.
  • Produces earnings above industry norms.
  • If the Operating Spirit leaves with the spouse, the going concern may cease to exist.
  • If it remains with the entity, intangible value survives.

Intangible Residual

  • The value remaining after deducting tangible assets.
  • May persist, shrink, or collapse to zero depending on transferability and survivability.

Technical Obsolescence Risk (Factor #7)

  • Risk that a business’s core value driver is being replaced or is overly dependent on a single individual.
  • Owner-dependence is a form of obsolescence risk.
  • If the owner exits, business value may disappear.

The Divorce Valuation Paradox

Intangible Value Under Stress

The Scale of Global Assets

As of 2026, approximately 68% of global business value is intangible. In divorce proceedings, that value is frequently overstated, understated, or entirely missed.

The reason is structural: divorce reframes the valuation question from:

Why Traditional Valuation Approaches Fail in Divorce

Market Approach
Fails where transactions are hypothetical or where the business is effectively unsaleable without the operating spouse.

Asset Approach
Assumes assets retain value independent of operation often false in owner-dependent businesses.

Income Approach
Projects earnings without testing dependency on a specific individual. Where owner-dependence exists, projected income may be illusory.

Forensic Valuation Requires Survivability Testing

Intangible assets cannot be presumed. They must be:

  • Identified
  • Measured
  • Weighed
  • Stress-tested for post-separation survivability

This is the purpose of the Eric Jordan 25 Factors Affecting Business Valuation, applied in conjunction with the 5 Senses Inspection Report.

This methodology does not assume value. It proves or disproves it.

Experience Is Not Optional It Is Functional

Assessing whether a business survives the loss of its operating spouse cannot be done solely from financial statements.

Expert judgment under complexity relies on pattern recognition developed through direct operational experience. A practitioner without firsthand business operation experience may fail to detect fragile, person-dependent value, regardless of credentials.

Evidentiary Consequences in Divorce

A valuation that:

  • Assumes intangibles where none survive, or
  • Ignores intangibles that are transferable

produces inequitable outcomes.

Courts require explainable, testable evidence, not valuation assumptions.

Conclusion

In divorce, business value is not fixed. It may:

  • Increase
  • Decrease
  • Or collapse entirely

depending on whether revenue, systems, and relationships are transferable to the business or remain personally attached to the operating spouse.

Only forensic valuation can distinguish between the two.

The Divorce Act Nova Scotia (Halifax)

    1 What the Divorce Act is (and is not)

    The Divorce Act is a federal statute enacted under Parliament’s constitutional authority and applies uniformly across Canada, including Nova Scotia.

    The Act governs one thing only:

    • The legal dissolution of a marriage

    It does not govern:

    • Division of property or debts
    • Ownership or valuation of businesses
    • Equalization of marital assets
    • Division of shares, goodwill, or professional practices
    • Unmarried or common-law relationships

    Those matters are governed by Nova Scotia provincial legislation, primarily the Matrimonial Property Act, and are frequently where valuation evidence becomes critical.

    2 When the Divorce Act applies in Nova Scotia

    The Divorce Act applies only if all three conditions are met:

    • The parties are legally married
    • One spouse applies for a divorce
    • At least one spouse has been ordinarily resident in Nova Scotia for at least one year immediately before filing

    If spouses separate but do not seek a divorce, the Divorce Act does not apply — even though parenting or support issues may still proceed under Nova Scotia law.

    3 Grounds for divorce (Section 8)

    Canada operates under a no-fault divorce regime. The Act recognizes three grounds:

    A. One-Year Separation (Most Common)

    • Can occur under the same roof
    • Can be backdated
    • No consent required

    B. Adultery

    • Must be proven
    • Rarely pursued due to cost and evidentiary burden

    C. Physical or Mental Cruelty

    • Must render continued cohabitation intolerable
    • High evidentiary threshold
    In practice: More than 95% of divorces in Nova Scotia proceed on the basis of one-year separation.

    4 Parenting orders (Post-2021 Framework)

    The Divorce Act was substantially modernized in 2021, changing how parenting disputes are addressed across Canada, including in Halifax.

    Key changes:

    • The terms “custody” and “access” were removed
    • Replaced with:
      • Decision-making responsibility
      • Parenting time

    This reform was intended to reduce adversarial framing and focus on children’s needs rather than parental entitlements.

    Best Interests of the Child (Section 16)

    The child’s best interests are the paramount consideration. Courts in Nova Scotia must consider:

    • The child’s age, needs, and circumstances
    • Strength and stability of parental relationships
    • History of caregiving
    • Child’s views (where age-appropriate)
    • Each parent’s ability to support the child’s relationship with the other parent
    • Family violence, including coercive control and financial abuse

    There is no presumption of equal parenting time.

    5 Child support

    Child support under the Divorce Act:

    • Is a right of the child
    • Is governed by the Federal Child Support Guidelines
    • Is primarily income-driven and table-based

    Nova Scotia courts take a firm approach to:

    • Underreported income
    • Self-employment and cash-based earnings
    • Artificially depressed income

    Where a spouse owns or controls a business, courts routinely:

    • Look beyond tax returns
    • Impute income where appropriate
    • Adjust for discretionary expenses and retained earnings

    6 Spousal support

    Spousal support is governed by:

    • The Divorce Act, and
    • The Spousal Support Advisory Guidelines (SSAGs)

    The SSAGs are not binding law but are heavily relied upon by Nova Scotia courts.

    Entitlement is not automatic. Courts assess:

    • Length of the marriage
    • Roles assumed during the marriage
    • Economic disadvantage or benefit
    • Ability to achieve self-sufficiency
    • Compensatory vs. non-compensatory claims

    Support may be:

    • Interim
    • Fixed-term
    • Indefinite (often in long marriages or where age or health limits earning capacity)

    7 Enforcement and variation in Nova Scotia

    Orders made under the Divorce Act:

    • May be varied upon a material change in circumstances
    • Are enforced in Nova Scotia through the Maintenance Enforcement Program (MEP)

    Common variation triggers include:

    • Retirement
    • Sale or restructuring of a business
    • Illness or disability
    • Significant income change
    • Children aging out of support

    8 What the Divorce Act deliberately avoids

    The Divorce Act does not address:

    • Division of the matrimonial home
    • Business valuation
    • Equalization of marital assets
    • Division of shares or goodwill

    In Nova Scotia, these issues are governed by the Matrimonial Property Act, where expert valuation evidence is often decisive.

    9 Why the Divorce Act matters financially in Nova Scotia

    From a financial and valuation perspective, the Divorce Act:

    • Establishes ongoing support obligations
    • Drives income analysis and imputation
    • Requires scrutiny beyond reported taxable income
    • Creates long-term cash-flow consequences

    It answers: Who pays, how much, to whom, and for how long?

    It does not answer: What is the business worth?

    That question falls under provincial law and valuation evidence.

    10 Practical bottom line (Nova Scotia)

    • Federal law
    • Applies only to married spouses seeking divorce
    • Uniform across Canada
    • Focuses on:
      • Divorce
      • Parenting
      • Child and spousal support

    Property division and business valuation are governed by Nova Scotia law.

    Put simply: The Divorce Act decides who pays and who parents. Nova Scotia law decides who gets what.