Definition of company valuation
The purpose of the company valuation is to determine the most realistic value possible for the company. The Institut der Wirtschaftsprüfer (IDW) assumes that the company value is fundamentally determined by its ability to produce surpluses, ie the present value of future surpluses forms the theoretically correct company value.
In practice, however, this is not a way to determine the company's value, since the future is uncertain and subjectively differently assessed.
Assessment & Techniques
The assessment can use the following techniques:
The individual valuation, in which the company value is determined by adding the values of all parts of the company that can be inventoried. The values of the individual parts are recorded independently of one another. Combination effects are ignored.
The overall assessment, in which the combination effects are taken into account in accordance with practice. It is interested in the benefit from the use of all objects in the company, which is expressed in the surpluses that the company generates.