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Net asset backing method

The net asset backing method provides the least complex and consistent basis for assessing the value of private companies. The method values the shares in a private company by calculating the:

  • adjusted net asset position of the company, by deducting company liabilities from the current market value of the assets, and
  • assessable value of shares by determining the amount of surplus capital that would accrue to each share if wound-up.

The calculation is based upon information in the company balance sheet and depreciation schedule taking into consideration the current market value rather than the historical value as may appear in the balance sheet.

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