Valuation date

CBV Institute’s glossary defines a valuation as developing an opinion or conclusion of value at a valuation date, and defines the valuation date as the specific point in time at which the conclusion of value applies. A sale may close on a later day, after the business has changed, so ask for the date a report uses and how it relates to the closing date. See how long a business valuation is good for.

When a statute fixes the date

In some disputes the law, not the valuator, picks the day. Under the federal Canada Business Corporations Act, s.190(3), a shareholder who dissents under s.190(1), which is itself subject to sections 191 and 241, and complies with the section is entitled, when the action becomes effective, to be paid the fair value of the shares, determined as of the close of business on the day before the resolution was adopted or the order was made, subject to the limit in s.190(26). For a corporation incorporated under a provincial Act, check that Act instead.

What to ask

• The date stated in the report and the date the contract or statute requires.
• What changed in the business between the two dates.
• How a comprehensive valuation report records its date.