How long is a business valuation valid for?

A valuation speaks to one date, it does not run out

A valuation report names a valuation date. Its conclusion is what the business, or the shares, units or partnership interest being valued, was worth on that day, based on what was known about the business at the time. That statement does not become wrong as the years pass. It simply becomes older.

So the useful question is not whether a valuation has expired, but whether its date still suits the decision in front of you. No general rule sets a shelf life, such as six or twelve months, for every purpose; the ATO describes a market value as time-specific for a given date. A lender, a buyer or a shareholder agreement may set its own rule about how recent a valuation must be, so check the document that asks for one.

The valuation date is also not the date the report is signed. A report is often finished weeks or months after its valuation date, because the valuer needs the accounts to that date first.

When an older valuation stops fitting

For a sale, a buy-in, a buyout or a family handover, the price is agreed now, so an old figure can mislead both sides. A valuation is more likely to need a new date when:

• trading has moved, up or down, since the valuation date
• a major customer, contract, lease or key staff member has been won or lost
• the ownership has changed, such as new shares issued or a partner leaving
• conditions in the industry, or interest rates, have shifted in a way a buyer would notice
• the purpose has changed, because a figure prepared for one purpose is not automatically fit for another

Where you need value at more than one date, for example when one shareholder left last year and another is joining now, each additional valuation date in the same engagement is $495 + GST. The fixed fee applies once we confirm the interest, purpose, structure and records fit the fixed-fee scope. Anything outside it is quoted in writing before we start. Fixed fee, confirmed in writing before we start. No hourly billing and no surprises.

Why a 30 June 2027 valuation can matter for years

The CGT changes work the other way. If a business interest is held by an Australian resident individual, or by a trust with at least one eligible beneficiary, and is still held at the end of 30 June 2027, the law treats it as sold and bought back just before 1 July 2027. Market value at that moment is the default starting figure for working out the gain when the interest is eventually sold, which may be many years away. A company’s own business assets bought on or after 20 September 1985 are not part of this rule.

So a valuation as at 30 June 2027 does not go stale in the usual way. Its job is to show value at one fixed moment, and that moment never moves. Whether you use market value or an apportioning method (only a draft so far) is a choice made with your tax return for the year you later sell, and your tax adviser decides which suits you.

Independent Business Valuation values businesses and business interests, not property or personal assets. A valuation as at 30 June 2027 is prepared after that date, once your records to 30 June 2027 are available. You can book your place now.