25 Factors Affecting Business Valuation

Cost of Liquidation

We need to remember the Canada Income Tax Act requires us to always apply "fair market value" and "reasonable judgment and objectivity in the selection and analysis of the relevant facts of each valuation". This experience is the purview of the entrepreneurial valuator who has usually had personal experience in the liquidation of assets on both the buy side and the sell side.

An entrepreneurial valuator with relevant experience, especially one with auction experience, is going to determine a fair market liquidation cost if in fact the factor is relevant.