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Business Valuation and Divorce Business Valuation in Prince George, British Columbia

Court-Accepted, Case-Law-Backed Business Valuations in Prince George, BC

Eric Jordan, CPPA - International Business Valuation Specialist

Empirical Basis for the 68% Intangible Asset Midpoint

The following independent global institutions provide the empirical foundation for the 68% Intangible Asset Midpoint applied in this forensic valuation. Collectively, these authorities confirm that traditional accounting models (Market, Asset, and Income approaches) systematically fail to identify the majority of modern economic value.

1. World Bank Group

Primary Reference:
The Changing Wealth of Nations 2024: Managing Assets for the Future

Key Findings:
The World Bank’s Comprehensive Wealth framework demonstrates that in high-income OECD economies, Intangible Capital including human capital, social capital, and proprietary institutional knowledge accounts for approximately 70% to 80% of total national wealth.

Application to this Case:
This establishes that the Intangible Residual is the primary driver of economic value. A valuation focused only on tangible assets ignores the largest component of the owner’s property.

2. McKinsey Global Institute (MGI)

Primary Reference:
The Rise and Rise of the Global Balance Sheet: How Wealth and Debt Have Grown Faster Than GDP

Key Findings:
MGI’s longitudinal analysis confirms the ongoing dematerialization of the global economy. Since the 1990s, investment in intangible assets data, software, intellectual property, and operational systems has grown approximately 300% faster than investment in physical assets.

Application to this Case:
This validates Factor #4 (Proprietary Systems) and Factor #15 (Proprietary IP) as high-weight value drivers, confirming that economic value has migrated from physical infrastructure to intellectual systems.

3. UBS / Credit Suisse Global Wealth

Primary Reference:
Global Wealth Report 2024 & 2025

Key Findings:
These reports document total global assets exceeding USD $500 trillion and identify a structural shift in which non-financial assets increasingly depend on intangible networks connectivity, reputation, and trust to maintain market value.

Application to this Case:
This supports the Five-Senses Inspection methodology by demonstrating that customer experience and trust (Factor #25) are quantifiable and defensible economic anchors of private business value.

4. Organisation for Economic Co-operation and Development (OECD)

Primary Reference:
OECD Compendium of Productivity Indicators (2025 Edition)

Key Findings:
The OECD identifies Knowledge-Based Capital (KBC) as the primary driver of modern productivity and explicitly acknowledges that traditional financial statistics “hardly detect” the organizational and reputational assets responsible for revenue generation.

Application to this Case:
This provides the legal justification for forensic intervention. Where traditional accounting fails to identify property, expert methodology is required to satisfy judicial standards of completeness.

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 “What did this business earn?” to “What would survive if this spouse left?”

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.

Family Law Act (British Columbia) Prince George

In British Columbia, the Family Law Act (FLA) governs how property, debt, and financial interests are divided when spouses separate or divorce. This explicitly includes businesses, professional practices, shares, and other income-producing assets.

Business valuation plays a central role under the Act whenever one or both spouses own or control a business.

What the Family Law Act Covers for Prince George

Under the FLA, the court considers:

  • Family property (to be divided)
  • Excluded property (generally not divided, but value increases may be)
  • Family debt

A business interest can fall into any of these categories depending on when and how it was acquired.

Businesses as Family Property

A business may be treated as family property if:

  • It was started or acquired during the relationship, or
  • Its value increased during the relationship

This includes:

  • Corporations and shares
  • Sole proprietorships
  • Partnerships
  • Professional practices
  • Holding companies

Even if only one spouse legally owns the business, its value may still be divisible.

Excluded Property & Growth in Value

Some business interests may be excluded property, such as:

  • Businesses owned before the relationship
  • Businesses received by gift or inheritance

However:

  • Any increase in value during the relationship is generally divisible

This makes valuation at two dates critical:

  • Date of relationship start
  • Date of separation

Role of Business Valuation Experts

In Family Law Act matters, valuation professionals are typically retained to:

  • Determine fair market value of a business
  • Separate personal goodwill vs. enterprise goodwill
  • Normalize earnings (remove personal or discretionary expenses)
  • Address income manipulation concerns
  • Provide court-ready valuation reports

Valuations are commonly used in:

  • Negotiations and settlements
  • Mediation or arbitration
  • Supreme Court of British Columbia proceedings

Key Principle

The Family Law Act is guided by fairness and equal division, unless unequal division is justified. The goal is to fairly divide the economic value created during the relationship, including business value.

Business valuation evidence is often the deciding factor in how assets are divided.

In Simple Terms

  • Business valuation is fundamental under BC’s Family Law Act
  • Businesses can be family property or excluded property
  • Growth in value during the relationship is usually shared
  • Accurate, defensible valuation is essential
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