Fair Value calculation after deduction of equipment disposal costs, under impairment accounting

The listed manufacturer company Q was instructed by their auditors to consider impairment of the fixed assets of the Thai subsidiary C in connection with the continuous deficit of the subsidiary, just before the announcement of financial results.
Company C outsourced real estate and equipment valuation to a local real estate valuation company in Thailand. However, from the viewpoint of concern about quick delivery and reliability of valuation, the auditors recommended that the equipment valuation also be obtained from a company specializing in movable property valuation.
Company C requested equipment valuation to Gordon Brothers Japan (GBJ), which has abundant experience in valuation of movables and can handle overseas projects, for the impairment test.

Client　　　　　　 : Business company（Company C）

Purpose of valuation : Fair value calculation (IFRS) after deduction of equipment disposal costs under impairment accounting

Type of value 　　　 : Fair value after deduction of disposal costs

Before starting the valuation work, GBJ worked with Company C and the auditors to determine the value definition and the valuation approach that is feasible and realizable in a short period of time.
Although it was difficult to travel overseas due to the ongoing COVID-19 situation, GBJ provided support for local inspections and value calculation in line with the local market to a Thai partner company (used machinery and equipment trading company) which with GBJ had built a close relationship. Based on a high level of trust with the company, GBJ carried out the scheduling and quality control.
The equipment valuation of the local real estate valuation company separately outsourced by Company C was not in time for delivery. On the other hand, GBJ’S valuation was able to announce the financial results on time without any problems by the delivery date, contributing to the smooth implementation of the audit.