How often should you value your business assets?

Opinions vary, but a wise business owner would consider a valuation on all property, plant equipment, and actual businesses every three years.

However, South African business owners have encountered a unique challenge if their assets were purchased off-shore.

In an article entitled “Fluctuating Rand Plays Havoc with Insured Values and Risk Exposures”, insurers AON explored some sobering facts. As we know, the past four years have seen the Rand take a pounding and lose significant value against the Pound, the Dollar and the Euro. While we can deal – for the most part – with these fluctuations within the South African market, it does make a difference to imported goods.

A product purchased in Europe in 2012 may cost as much as 30% more to replace in today’s terms. To be forced to find an additional third of the value of your assets is not a pleasant thought, and it becomes apparent how important an up-to-date valuation is.

In cases like these, you would want to look very closely at your insured values. Some insurers offer a clause which deals with currency fluctuations, but may be limited to a certain percentage of the item’s value.

If an essential business product is only available off-shore, then it is vital to make sure that the correct, and current cost, is factored into your business value. If you are considering a merger, an outright sale of your business, or require a valuation for any other purpose, then the correct replacement costs need to be assessed.

It may also be an eye-opening exercise to see how your business value has increased or decreased on the back of the falling Rand, and assist in planning your forward trajectory.

Yes, there are multiple factors that come into play when performing a professional business valuation – with currency fluctuation being just one of them.

Our dedicated team of seasoned professionals are full of useful information and years of experience, and are standing by to assist you. Give us a call on 0860 999 440 or visit us at for more information.