The research engaged scenario analysis to arrive in three different possible value estimates, and Monte Carlo simulation to take uncertainties into accountto produce a frequency distribution containing all possible values between predetermined limits. This paper aims to demonstrate a method to quantify uncertain variables into the business valuation for tax purposes. ![]() Valuation reports under a tax investigation process only present an estimated value in the form of a single value, which is unable to represent uncertainty sufficiently. As such, most business valuations for tax purposes are unable to capture uncertainty adequately. Unfortunately, these factors cannot be effectively measured and reported in business valuation for tax purposes. It is known in the literature that changes in economic structure, people’s behavior, business risk, or political leader are expected. ![]() An important but often neglected aspect in business valuation for tax purposes is uncertainty.
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