Given the continued increase in the number of worldwide cases of COVID-19 accompanied by the decline in equity market values and higher volatility resulting from increased economic uncertainty and public health concerns, we expect valuations to be increasingly complex in the weeks to come.
In particular, valuation preparers will be faced with the difficult task of assessing fair value for the 31 March 2020 reporting date (and thereafter). Public companies may be faced with triggering events and be compelled to re-evaluate recoverable amounts and fair values of assets. Similarly, private equity and pension funds may need to assess fair value adjustments. These valuations will require significant professional judgment.
This publication is to highlight some, but not necessarily all, of the challenges that preparers of valuations are likely to face in the coming weeks.