In recent years, data and its processing have ascended to paramount importance across the business landscape. While data has always underpinned the success of business models, contemporary technological advancements have propelled the relevance of this asset to unprecedented heights.

In tandem with the expanding significance of data in business, valuation experts are today increasingly tasked with analysing and assessing the value of data and its influence on the company value. Traditional approaches, however, often overlook the nuances of data as an intangible asset, and not rarely fail to adequately map the monetization potential of data (or the lack thereof).

The IVSC has adressed this important topic by its recent publication of the perspecives paper „Valuing Data“. The paper highlights the special characteristics of „data“ from a business and financial point of view, and shows how valuation experts can approach analysis and valuation of this important asset. Readers who seek more information on the impact of privacy issues and how the life cycle of data looks like will find what they are looking for, and so will readers who are rather interested in accounting and reporting issues in the context of data.

Another hot topic in business valuation is the integration of ESG factors into business valuation conclusions. In this issue of EBVM, Coşkun takes a stand on this topic, covering the links between ESG and the Sustainable Development Goals, corporate social performance and corporate financial performance, and the integration of ESG considerations into business and real estate valuations.

Seppänen provides an overview about legal valuation issues in Finland. Concrete for shareholder squeeze-outs, estate and gift taxation, and marital dissolution.

Schöniger/Snellen/Tschöpel summarise the results of the 18th KPMG’s Cost of Capital Study 2023 on key value drivers such as planning uncertainty, growth expectations, sustainability, WACC and its components, triggering events and impairments.

The data section includes country-specific discounts for lack of marketability based on option pricing models provided by Grbenic and the European industry betas and multiples provided by KPMG.

This article on country specific valuation topics briefly reviews the key issues regarding judicial valuation in three main areas in Finland: minority shareholder squeeze-outs, estate and gift taxation, and marital dissolution. The degree and detail of guidance provided for judicial valuations varies significantly depending on the applied law.

Recently the 18th edition of KPMG’s Cost of Capital Study was published. As in previous editions, the study presents current developments regarding the preparation of business plans and the derivation of cost of capital, as well as its relevance for company values and company value developments. The study examines the impact of increased uncertainties and accompanying interest rate and inflation developments on business models, corporate development and long-term return expectations (cost of capital), based on sector-specific analyses. 2023 response rate demonstrates once again the high practical relevance of the annual Cost of Capital Study. In total, 322 companies participated in this year’s Cost of Capital Study. Of the participating companies, 240 are based in Germany, including 65 percent of the DAX-40 companies.

The integration of ESG factors into valuation decision-making is still at an early stage of development. This presents a significant challenge, particularly when it comes to projecting future cash flows and determining the cost of capital. This paper first provides an overview of the origin, role, and significance of ESG. This discussion also clarifies the linkage between ESG and Sustainable Development Goals (SDG), as well as the connection between corporate social performance (CSP) and corporate financial performance (CFP). Second, it examines the integration of ESG considerations into business and real estate valuation, highlighting ongoing challenges in ESG-sensitive valuation. Finally, the author reviews recently updated IVS ESG rules, evaluating their potential gaps and impacts.

All data has been obtained from the KPMG Valuation Data Source. The data source provides access to cost of capital parameters from more than 150 countries and sectors as well as peer-group-specific data from over 16,500 companies worldwide. The data covers the period from 2012 to the present. The data is updated monthly and is accessible from anywhere around the clock. See KPMG Valuation Data Source for details.

Over the years, a variety of Option Pricing Models (hereinafter OPM) have been introduced to estimate Discounts for Lack of Marketability (hereinafter DLOM), capturing the key value drivers stock price volatility, period of illiquidity, and dividend yield. The DLOM are computed employing three OPM generally proved to generate DLOM estimates that comport with DLOM empirically observed on the European market according to varying assumptions about the period of illiquidity, the size of the underlying DLOM benchmarks, the volatility of the underlying stock return and, the dividend yield (employing closed-form solution formulae).

The computations are based on stock and company data directly collected from the stock exchanges as well as from yahoo!finance.