Complex Asset Valuation

Valuation of Derivatives and Share-based Compensation

Often, securities issued as contingent consideration in M&A transactions or those issued to employees as share-based compensation (e.g., ESOPs, EVUs, etc) require complex asset valuation for financial reporting or tax purposes.

Our professionals specialise in understanding the terms of these securities/ awards and converting them into customised financial models. These, combined with our expertise in identifying supportable assumptions help us to carry out reliable valuation analyses that stand the scrutiny of auditors as well as tax authorities.

Our Complex Asset Valuation Services include:

Valuation of Derivatives and other complex assets
Valuations for share-based payments (ESOPs, SARs, RSUs, EVUs and other equity instruments)

D and P Advisory Professionals have deep experience with the full range of equity valuation techniques, including:

Black-Scholes formula
Binomial lattice models
Monte Carlo simulation

We provide valuation of the following types of securities:

Embedded derivatives (e.g., conversion option of a convertible bond) under Ind AS 109 and IFRS 9
Expected Credit Loss Analysis under Ind AS 109 and IFRS 9
Securities with built in downside protection (ratchets/ anti-dilution rights)
Debt component of a convertible debenture under Ind AS 32
Preference shares for tax and financial reporting purposes
Call/put options held by minority shareholders after the acquisition of a controlling interest
Interest rate swaps/options, currency swaps/options and equity derivatives

In Complex Asset Valuation services, D and P Advisory team understands the subject financial instrument fully, converts it into a financial model and estimates the required parameters (volatility, dividend yield, interest rate, etc.) to deliver a well-supported valuation that fulfills the requirements under IFRS 9, IAS 32 (as well as Ind AS 109, Ind AS 32), besides income tax requirements.

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Gurugram/Haryana
The Circle – Millenium City Centre, 3rd floor, Millenium City Centre Metro Station, Gurugram, Haryana – 122002
Bangalore
Prestige dotcom, Field Marshal Cariappa Rd, Srinivas Nagar, Shanthala Nagar, Ashok Nagar, Bengaluru, Karnataka – 560025
Mumbai
Unit No 701, 7th Floor, Skyline Icon, Andheri – Kurla Road, Marol, Andheri East, Mumbai, Maharashtra – 400059

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Email
contactus [at] dandpadvisory.com

D and P Advisory is a premier valuation services provider and a boutique transaction advisory firm started with an aim to provide high-quality consulting services.

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