Hong Kong Valuation Guide
Financial reporting valuation
Valuation analysis designed for the accounting standard, audit trail and disclosure objective—not just a standalone number.
HKFRS and IFRS
Valuation work embedded in the reporting cycle.
Scope, timing and documentation should be agreed early with management and, where appropriate, the auditor. Late-stage valuations often create avoidable pressure on forecasts, data and review.
Purchase price allocation
Identify and value acquired intangible assets, tangible assets, contingent consideration and other items following a business combination.
Impairment testing
Assess recoverable amount, cash-generating units, value in use, fair value less costs of disposal and key sensitivity disclosures.
Fair value measurement
Determine the principal market, valuation technique, market participant assumptions, input hierarchy and disclosures under HKFRS 13.
Share-based payments
Value employee options, restricted shares, performance conditions and modifications using suitable option or simulation models.
Asset revaluation
Support investment property, property, plant, machinery, biological assets and other classes where revaluation or fair value is relevant.
Employee benefits
Actuarial measurement of long service payment obligations and other defined benefit arrangements under HKAS 19.
A review-ready package
What the working papers should show.
- Purpose, standard, unit of account and valuation date
- Source and ownership of financial data
- Forecast development and management approval
- Method selection and calibration
- Market data, comparable screening and adjustments
- Discount rate and terminal value support
- Cross-checks, sensitivities and conclusion
- Clear link from model to report and disclosures
Audit support is part of the deliverable.
A shorter report is not always a cheaper engagement if the model, source evidence and review responses still need to meet the same technical standard.
Read the HKFRS guide →Typical information needed.
| Area | Examples | Why it matters |
|---|---|---|
| Financial history | Audited statements, management accounts, trial balance | Normalisation, trend analysis and reconciliation |
| Forecasts | DCF projections, budgets, business plans, capex and working capital | Recoverable amount and income approach |
| Transaction documents | Sale agreement, term sheet, completion accounts | Consideration, rights and PPA scope |
| Asset records | Fixed asset register, invoices, property details, IP documents | Identification, ownership and valuation attributes |
| Review context | Accounting memo, auditor questions, prior valuation | Consistency and efficient issue resolution |
Align the valuation timetable with reporting deadlines.
Early scoping helps secure forecasts, transaction documents, market data and specialist inputs before audit review peaks.