CityLinkers provides valuation advisory services to our clients but not limited to merger and acquisitions, management strategy planning and financial reporting.
We have in depth knowledge and understanding of the International Financial Reporting Standard (IFRS) and valuation techniques. Together with our broad industry exposures, we are capable of providing customised services and practical solutions to our clients in identifying potential opportunities, exploring values and highlighting risks in order to assist our clients to reach their goals.
What Are Professional Valuation Services?
Professional valuation services provide independent, defensible assessments of the economic value of businesses, equity, intangible assets and financial instruments. CityLinkers delivers valuation advisory services for mergers and acquisitions, management strategy planning and financial reporting, combining deep knowledge of IFRS and Hong Kong Financial Reporting Standards (HKFRS) with recognised valuation methodologies. Our work supports boards, investors, regulators and courts with conclusions that withstand scrutiny.
How Does CityLinkers Approach Business Valuation for M&A Transactions?
Business valuation for M&A requires a clear understanding of the transaction context, the target's cash-generating capacity, and the risks that affect future returns. CityLinkers analyses historical financials, normalises earnings, and projects forward-looking cash flows under management and independent cases. We apply discounted cash flow (DCF), market multiples and precedent transaction benchmarks, triangulating methods to reach a defensible value range. Our M&A valuations also address synergy assessment, minority discounts, control premiums and structuring considerations that influence the negotiated price.
What Is Valuation for Financial Reporting Under IFRS and HKFRS?
Valuation for financial reporting aligns asset and liability values with the recognition and measurement requirements of IFRS 3 (Business Combinations), IFRS 13 (Fair Value Measurement) and their Hong Kong equivalents HKFRS 3 and HKFRS 13. CityLinkers determines fair value for identifiable assets acquired, contingent consideration, and equity instruments issued in acquisitions. We document valuation techniques, inputs and assumptions in line with the fair value hierarchy, ensuring audit-ready deliverables that satisfy external auditors, the Stock Exchange of Hong Kong and the Securities and Futures Commission where applicable.
How Is Impairment Testing Conducted Under IAS 36 / HKAS 36?
Impairment testing under IAS 36 / HKAS 36 requires entities to compare the carrying amount of assets or cash-generating units (CGUs) with their recoverable amount, defined as the higher of fair value less costs of disposal and value in use. CityLinkers supports annual and trigger-event impairment reviews by building CGU-level DCF models, estimating appropriate discount rates (WACC), terminal values and sensitivity ranges. We ensure assumptions are consistent with market evidence and management budgets, providing documentation that withstands audit inspection and regulatory query.
What Is Purchase Price Allocation (PPA) and Why Does It Matter?
Purchase price allocation assigns the cost of a business combination to the identifiable tangible and intangible assets acquired and liabilities assumed, with any residual recorded as goodwill. CityLinkers performs PPA by identifying all separable intangibles — brands, technology, customer relationships, backlog, non-compete agreements — and valuing each using appropriate methods. Accurate PPA affects post-acquisition amortisation charges, future impairment testing baselines, and the presentation of consolidated financial statements, making it critical for both acquirers and auditors.
How Does CityLinkers Value Intangible Assets?
Intangible asset valuation applies specialised techniques to assets that lack physical substance but generate economic benefits. CityLinkers values brands using the relief-from-royalty and excess-earnings methods, patents and technology using income and cost approaches, and customer relationships using the with-and-without or customer attrition methods. We also value domain names, trade dress, software and in-process research and development. Each engagement considers remaining useful life, competitive positioning, legal protection and market comparables, producing conclusions suitable for transactions, reporting, tax and litigation.
What Valuation Methodologies Does CityLinkers Apply?
CityLinkers applies three broadly recognised valuation approaches. The income approach includes discounted cash flow and capitalisation of earnings, reflecting the present value of expected future benefits. The market approach uses comparable company multiples, precedent transactions and guideline public company data. The asset-based approach derives value from the net fair value of underlying assets less liabilities. We select and weight methods based on the nature of the subject interest, available data, and the purpose of the valuation, ensuring methodology alignment with professional standards including IVS and RICS.
How Does Valuation Support Strategy, Disputes and Fairness Opinions?
Beyond transactions and reporting, valuation supports strategic decision-making, dispute resolution and fairness opinions. CityLinkers assists management with scenario analysis, capital allocation, restructuring valuations and shareholder buy-out pricing. In disputes and litigation, we serve as independent valuation experts, providing expert reports and witness testimony on damages, share value and minority oppression matters. We also issue fairness opinions for related-party transactions, delistings and scheme of arrangement proposals, giving independent boards and independent boards committees the assurance required to recommend transactions to minority shareholders.
What standards does CityLinkers follow when performing valuations?
CityLinkers performs valuations in accordance with International Valuation Standards (IVS), RICS Valuation — Global Standards, and the relevant IFRS and HKFRS requirements. We also consider Hong Kong Stock Exchange listing rules and SFC guidance where valuations support regulated transactions, ensuring our deliverables meet the expectations of auditors, regulators and courts.
When is impairment testing required under HKAS 36?
Impairment testing is required annually for goodwill and indefinite-life intangible assets, and whenever a triggering event indicates that an asset or cash-generating unit may be impaired. Triggers include declining market capitalisation, adverse regulatory changes, obsolescence, and significant changes in market conditions or cash flow projections that suggest carrying amounts may not be recoverable.
What is the difference between fair value and value in use?
Fair value under IFRS 13 is an exit price — the amount received to sell an asset in an orderly transaction between market participants. Value in use under IAS 36 is an entity-specific measure reflecting the present value of expected future cash flows from continued use. The recoverable amount is the higher of these two measures, used for impairment assessment.
How are intangible assets identified in a purchase price allocation?
Intangible assets are identified by assessing whether they are separable or arise from contractual or legal rights. CityLinkers reviews customer contracts, brand registrations, patent portfolios, technology licences, non-compete agreements and workforce factors. Each identifiable intangible is valued separately from goodwill, with the residual purchase consideration recorded as goodwill on consolidation.
What valuation methods are used for share-based payment awards?
Share-based payment awards under IFRS 2 / HKFRS 2 are typically valued using option pricing models such as Black-Scholes-Merton or binomial lattice models. Inputs include exercise price, expected volatility, risk-free rate, expected term and dividend yield. For awards with market or performance conditions, more complex models including Monte Carlo simulation may be applied.
Can CityLinkers provide expert witness testimony in litigation?
Yes. CityLinkers professionals serve as independent valuation experts in Hong Kong litigation and arbitration, including shareholder disputes, breach of contract damages, minority oppression petitions and matrimonial and probate matters. We prepare expert reports in compliance with court rules and provide oral testimony, with conclusions supported by rigorous analysis and documented assumptions.
What is a fairness opinion and when is it required?
fairness opinion is an independent assessment that a transaction's financial terms are fair to a specified group of shareholders from a financial point of view. It is typically required for related-party transactions, delistings, privatisations and schemes of arrangement under the Hong Kong Listing Rules, providing independent board committees with the support needed to recommend transactions to minority shareholders.
