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Customer relationships and customer contracts are valuable intangible assets that significantly contribute to a company’s revenue, profitability, and long-term growth. Accurately valuing these assets is essential for mergers and acquisitions, financial reporting, business restructuring, purchase price allocation, and strategic decision-making. Our experts provide independent and reliable valuation services to determine the fair value of customer-based intangible assets in accordance with internationally accepted valuation standards and applicable accounting requirements.
Valuation helps determine the fair value of customer relationships and contracts acquired or transferred as part of an M&A transaction
Identifies and allocates the purchase consideration to customer-related intangible assets in accordance with applicable accounting standards.
Supports the recognition, measurement, and disclosure of customer-based intangible assets in financial statements.
Determines the value of customer relationships and contracts acquired during a business combination for accounting and reporting purposes.
Assists in assessing the value of customer-based assets during internal reorganizations, demergers, or business restructuring exercises.
Demonstrates the value of long-term customer relationships and recurring revenue streams, strengthening the company's investment proposition.
Determines the value of an intangible asset based on the present value of the future economic benefits or cash flows expected to be generated by the asset.
Measures the value of an intangible asset by isolating the excess earnings attributable to that specific asset after deducting returns on all other contributory assets.
Estimates the value of an intangible asset by comparing it with similar assets or transactions observed in the market.
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Answers for business owners who want to understand the process before speaking with an expert.
Customer-based intangible asset valuation can be performed for customer relationships, customer contracts, subscription agreements, service contracts, distribution agreements, supply contracts, recurring revenue arrangements, customer lists, and client portfolios.
Customer relationships represent the long-term economic value arising from ongoing customer loyalty and repeat business, whereas customer contracts derive value from legally enforceable agreements that generate identifiable future cash flows over a defined period
The valuation typically requires customer contracts, historical revenue data, customer retention and attrition analysis, profitability information, contract terms, financial statements, and future revenue projections.
Customer relationships are typically valued using the Multi-Period Excess Earnings Method (MPEEM), which estimates the future economic benefits expected from existing customer relationships after deducting returns attributable to other contributory assets. The valuation considers factors such as customer retention, projected revenues, profitability, attrition rates, and the expected economic life of the customer base.
The timeline depends on the size of the customer base, complexity of the contractual arrangements, and availability of financial and operational information. Most valuation assignments are completed within a few weeks after receiving the required documentation.
India's most trusted SEBI Cat-I Merchant Banker & IBBI Registered Valuer Entity. 3000+ valuations delivered. Certified reports in 7 business days.
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