At Frenkels Forensics, our leading forensic accountants specialise in forensic accounting in divorce, London. With a head office in the capital and a network of regional offices, we work with many of the country’s leading divorce law firms and barristers’ chambers, providing the forensic accounting expertise they need to secure a fair outcome for their clients.
For assistance call us on 0330 118 8200 or Make An Online Enquiry.
Why Is Forensic Accounting Important In Divorce Matters?
When a couple divorces, their joint assets need to be divided in a way that is fair to them and their family. To facilitate a fair division, the assets must be accurately valued before meaningful settlement talks can begin or, where the split is acrimonious, before the parties attend a hearing. Where a couple’s business interests are significant, forensic accountants like us are usually called in to assist the parties and their legal advisors in understanding how much those assets are worth.
How Do Forensic Accountants Value Businesses In Divorce Matters?
Valuing a business for the purposes of a divorce financial settlement is an incredibly complex task. It necessitates an understanding of the various methods used to value businesses, how to select the appropriate method for the business at hand, and the extent to which the divorce might impact the business’s worth.
Examples of the types of methods our experts in forensic accounting in divorce, London, frequently use when valuing a business in divorce cases include the following:
• Capitalised Future Maintainable Earning Method
The capitalisation of maintainable earnings method calculates a business’s value according to its historical profit over a period of time and its risk. We might use this method to value a mature business with stable profits.
• Net Assets Method
As its name suggests, the net assets method calculates the value of a business according to the market value of its assets minus its liabilities. We might use this method when the business holds substantial tangible assets but minimal intangible ones, and where the value of those assets does not depend to any significant degree on future earnings or growth. Sometimes, we use the net assets valuation method as a floor value when using other valuation methods.
• Dividend Yield Method
The dividend yield method bases a company’s value on its annual dividends compared to its current share price. We might use this method when one of the parties is a minority shareholder in a company.
What Role Does Forensic Accounting Play In Divorce Cases?
The Courts are keen for divorcing couples to resolve the issues arising from their separation amicably wherever possible. This includes deciding how their assets should be divided. As a result, save in exceptional circumstances, divorcing couples must attend a Mediation Information and Assessment Meeting, more commonly known as a MIAM, before applying to Court for a Financial Order.
At a MIAM, an impartial third party, the mediator, will assess the suitability of the case for mediation. Mediation is a form of alternative dispute resolution method during which a mediator helps the parties identify solutions that work for them and their family. The couple is not obliged to attend a mediation even if the mediator believes their matter suitable, but many do, since it can save time and costs and is less acrimonious than Court proceedings.
If you decide to try and settle the financial aspects of your divorce through mediation, you need an accurate valuation of your assets and those of your ex-partner to facilitate meaningful discussions. That’s where forensic accounting in divorce comes in. When you are in possession of an impartial, expert valuation, you have a clear idea of where you stand and what a fair outcome would be, and your legal advisors can negotiate a fair settlement accordingly.
If you can’t reach a financial settlement with your ex-partner and need to seek the Court’s intervention, the Judge will likely order that the parties instruct a Single Joint Expert to value the relevant business interests. The Single Joint Expert will prepare a report for use by both parties and the Judge and may attend Court to explain their findings and methodology. Our experts in forensic accounting in divorce, London, are frequently instructed to act as Single Joint Experts in divorce matters, and our work is often determinative to the outcome of a case.
How Can Our Experts In Forensic Accounting In Divorce, London, Help?
Valuing businesses in divorce cases is central to our forensic accountancy practice, and our experience in this complex area is second-to-none. We are committed to adding real value to our client’s cases by distilling complicated accountancy principles into clear, accessible reports that facilitate a fair and just outcome for our clients and their families.
To discover more, please call us on 0330 118 8200 or Make An Online Enquiry.
“Thank you ever so much for the work and advice you have provided . The report was clear and accessible and will not hesitate to recommend you all.”
“I am indebted to you for your contribution, and for explaining things in plain English such that even lawyers can understand the issues”
“May I take this opportunity to thank you for your assistance in this matter. Counsel and the judge said that your report was one of the best they had seen in that it was concise and technically easy to understand.”
