MILES / Financial Reporting Valuation
Financial Instruments Valuation
Translate complex contract terms into understandable valuation analysis.
Discuss Financial Instruments Valuation
Conversion rights, redemption terms, preference rights and contingent payoffs can materially affect a financial instrument’s value. The model needs to reflect the contract and the relevant measurement basis.
MILES values convertible bonds, preference shares, warrants, forwards and call or put options, analysing contractual terms, underlying asset values and market parameters for financial reporting and transaction purposes.
When should you speak with us?
- You have issued or invested in convertible bonds or preference shares.
- A financing or transaction includes warrants, options or contingent contractual features.
- You need a reporting-date valuation or support for valuation assumptions requested by auditors.
How we help
Understand the contractual terms
Review conversion, redemption, priority, settlement and other features, using the accounting basis established by management and its advisers.
Select a model
Choose methods appropriate to the payoff structure and available data, including scenario or option-based analysis where relevant.
Analyse inputs
Assess underlying equity value, volatility, discount rates, credit risk and other parameters relevant to the instrument.
Explain results and changes
Document model outputs and key judgements, and analyse changes between measurement dates where included in scope.
What information is typically required?
- Executed agreements, term sheets and amendments
- Issue, measurement and maturity dates
- Capital structure, shareholder rights and underlying business information
- Previous valuations and relevant market or financing data
The information request will be tailored to the purpose and scope. If your records are incomplete, we can first discuss preparation priorities.
Frequently asked questions
Can the issue price simply be carried forward?
The issue price may be relevant evidence at inception. Its relevance at a later date depends on contractual features, business performance, market changes and the applicable measurement basis.
Can one model value every instrument?
No. Different settlement, conversion and preference terms create different payoffs. Model selection should follow the actual contract and measurement purpose.
Accounting standard: IFRS 9
Plan your financial instruments valuation work
Share your objectives, the assets or businesses involved, available information and expected timetable. We will discuss the scope, preparation priorities and next steps with you.
Enquire About Financial Instruments Valuation