Choosing the valuation date and valuing a business at a past date

The short answer, explained

A value is always a value at a date. The ATO's guidance describes market value as the estimated worth of an asset on the open market at a particular time, and its longer guide says the value is time-specific: markets change, and an estimate may be wrong for another date. The business changes too: customers come and go, staff leave, a lease is renewed or not.

So the first question in any valuation is: as at when? This page covers how the date is chosen, and how a business is valued at a date that has already passed. For property, APAVAL covers the same issue in retrospective property valuation.

Who or what sets the date

The ATO's guide puts the tax position plainly: the provision that needs a market value frames the asset to be valued and the valuation date, and a valuation for a future date will not be considered reasonable or acceptable. Its newsroom item on the first tranche of CGT reform legislation, passed by Parliament on 26 June 2026, applies the same idea: taxpayers may need market value immediately before 1 July 2027, and should not obtain a valuation before then. The detail of the 2027 rules may change if further legislation is passed; check the ATO's CGT reform pages. Oliver Group, the Valuo practice for restructures, tax and buyouts, explains the CGT date questions in detail in choosing the valuation date for CGT. For family law, Family Law Valuations covers the date in how a business is valued in a family law property settlement.

Valuing at a past date: the information rule

A retrospective valuation is not a current valuation with old numbers. The ATO's guide says a valuation should be based on the most relevant and reliable information that is known, or could reasonably be foreseen, at the valuation date. It adds that the hypothetical buyer and seller are presumed to act prudently by reference to the market at the valuation date, "not with the benefit of hindsight", and lists reliance on later information and unforeseeable events among the common problems it sees.

In practice that sorts information into three groups:

The ATO's minimum report contents include the date and whether the valuation is retrospective, so the report should say so on its face.

Worked example: the same business, with and without hindsight

This example is hypothetical. The figures and the 3.0 multiple are round numbers for illustration, not market evidence.

An accountant needs the value of a company's shares at 30 June 2024 for a related-party transfer that happened then. At that date, the business's maintainable earnings, assessed on the three years to June 2024, were $300,000. There was no sign that its largest customer was in difficulty. In March 2025 that customer became insolvent without warning, and earnings since have been about $220,000.

Check: $300,000 x 3.0 = $900,000. $220,000 x 3.0 = $660,000. $900,000 - $660,000 = $240,000, which is the $80,000 fall in earnings x 3.0.

The supportable value at 30 June 2024 is $900,000, because the customer's collapse could not have been foreseen then. (This assumes the 3.0 multiple already reflects the ordinary risk of relying on a large customer, which was known at the date.) The answer would differ if, at the date, the customer was already paying late or had said it was reviewing suppliers: a prudent buyer would then have weighed that risk, and the valuer would reflect it as it stood at the date, through earnings or the multiple, without assuming the outcome. You can test how much a change in earnings moves value in the capitalised earnings sensitivity tool.

Building the record for a past date

Retrospective valuations rely on evidence from the time, and the further back the date, the harder it is to assemble. Useful records include:

• financial statements, tax returns and BAS for the years up to the date, and the general ledger for the months around it;
• management reports, budgets and board or owner notes prepared before the date, which show what was expected then;
• customer contracts, the lease and staff records as they stood at the date;
• correspondence about any sale, offer or dispute at the time; and
• any earlier valuation, with its date and purpose (the ATO guide expects a valuer relying on one to explain its relevance and any differences).

A forecast or budget prepared at the time is more persuasive than one reconstructed later, because it cannot have been shaped by what happened next.

Limitations

• This page describes the ATO's general expectations for tax valuations and common valuation practice. Courts and particular statutes can have their own rules on dates and later evidence; get legal advice where that matters.
• The line between a foreseeable risk and an unforeseeable event is a judgement. The report should explain where the valuer drew it and why.
• Where records from the time are missing, a retrospective valuation may need wider ranges or stated assumptions, and some questions may not be answerable.
• Nothing here is advice on which tax provision or date applies to a particular transaction.

Next steps

• Identify the purpose and, for tax, the provision, then confirm the date with the client's tax adviser before instructing a valuer.
• Collect records created at or before the date, especially budgets and management reports.
• Write a short note of what was known at the date about customers, staff, the lease and the market.
• Use our valuation instruction checklist to record the date, and whether it is retrospective, in the engagement letter.

General educational information, not financial, tax or legal advice. Worked examples are hypothetical and do not value a real business. A valuation depends on its purpose, the evidence and the agreed scope.