The New Accounting

Business valuation has entered a new era. This era is defined not by simple account strategies, but by complex calculations of a wide variety of intangibles that constitute the true overall health of a company. This type of business valuation does not turn a blind eye to the true forces at play behind the success of a company. This changes the way that we, as business professionals, look at our firm’s interaction with the market.

In the past, business owners relied on simple accounting strategies to determine the value of their company. These valuations, however, were based on financials alone. The method used seemed adequate for many years, but there came a time when business consulting professionals began to realize that traditional book value failed to recognize the critical variables not generally reflected in the financial data. These details were discovered to be as relevant, if not more important, than the raw financial data traditionally relied upon by valuation experts.

What are these incredibly important intangibles you may ask? There are a variety of circumstances to consider, each having their own specific impact on the value of a company. One of the most important items to examine is the reputation of a firm. A positive reputation is a crucial key to success, and traditional accounting fails to factor this important variable into the company’s valuation. Another key element to consider is knowledge. Specialized knowledge gives certain companies a distinct advantage over their competition. Considerable knowledge is also important capital, yet it is not factored into a firm’s valuation by traditional accounting. How then, does one fully grasp the value of their company if they are utilizing financial statements alone? It is simply impossible to know the true value of your business unless you consider the value of intangibles. Valuation firms have been established who utilize the new accounting in order to define the true value of companies. One such firm at the forefront of this unique total business valuation is International Development Services. IDS offers the best business valuation services in the market today. If you want to know the true value of your company, then contact the valuation experts at International Development Services and discover the power of the new accounting.