Cat sits on the mat

MICK RUSE goes back to some fiscal share valuation basics.

WITH APOLOGIES TO costermongers forget about the concept of hypothetical open market sales; forget about case law on information standards; forget even about the complications of ITEPA 2003; the questions most commonly asked concerning the mechanics of fiscal share valuation are:

• in relation to trading companies 'What price earnings ratio (P/E) should be used?'; and
• in relation to investment companies 'What is the discount from net assets?'

Although there may be other aspects requiring particular consideration e.g. how to calculate earnings in the light of erratic results or how much deferred tax to deduct from fixed asset investments basic ready answers can usually be given to these questions.

Through experience most competent advisers can provide quick estimates of fiscal share value which should be fairly reliable. Underlying this ability it seems...