Business Valuations for Family Law & Litigation

Yes. Family law valuations must be independent, replicable, and defensible. They are prepared with the expectation they may be scrutinised by opposing experts, legal counsel, the Family Court, and the ATO. This requires deeper analysis, clearer disclosure of assumptions, and robust supporting data.

Validating assumptions is critical to supporting valuation conclusions. Courts and the Tax Office expect that key inputs — such as earnings, risk, and valuation multiples — are supported by independent, objective data, not subjective judgement alone. Public data sources rarely provide suitable benchmarks for small, family, and SME healthcare practices, which is why specialist, adjusted data is essential.

ASTUTEMED has access to industry-leading, healthcare-specific benchmarking data, including over 15,000 adjusted benchmarks for GP, specialist, and dental practices. Unlike public or generic industry reports, our data is:

• Adjusted specifically for valuation purposes

• Normalised for owner remuneration and related-party items

• Comparable by industry, size, revenue range, and location

• Independent of both the client and the valuer

This allows us to validate assumptions with true like-for-like comparisons.

We identify and adjust for abnormal or non-recurring income and expenses to ensure earnings reflect the sustainable, maintainable performance of the practice. This is critical in family law matters to avoid overstating or understating value.

Owner benefits are normalised to reflect market-based remuneration. This includes adjusting for:

• Actual owner drawings versus notional market salaries

• Non-commercial benefits

• Related-party transactions

These adjustments ensure EBIT reflects the true economic performance of the business.

Yes. Movements in accrued annual leave and long service leave provisions are reviewed and adjusted where necessary to prevent distortion of earnings, particularly where provisions fluctuate due to ownership or staffing changes.

Instant asset write-offs can materially impact reported profits. We adjust for these items across prior, current, and forward-looking periods to ensure earnings are representative of ongoing operations.

EBIT/FME and net profit margins are different KPIs. Industry analysis reports typically publish net profit margin data sourced from tax offices and government agencies. These figures are not adjusted for owner remuneration or valuation-specific normalisation.

EBIT/FME percentages used in valuations should be validated against adjusted EBIT/FME benchmarks, not net profit margins, to ensure accuracy and credibility.

Every valuation must arrive at an EBIT/FME value. Once determined, it is validated against adjusted industry benchmarks expressed as a percentage of revenue. Using clean, normalised data via addbacks and deductions significantly strengthens the credibility of this key assumption.

Our valuation reports clearly disclose:

• The source of EBIT/FME benchmarks used

• Why the benchmarks are comparable to the practice being valued

• How each assumption is independently supported

If reviewing a valuation, it is critical to ensure the benchmarks selected genuinely reflect the business being assessed.

Yes. Family law transactions frequently trigger income tax, CGT, and restructuring consequences. Our valuations are prepared to meet both Family Court expectations and ATO requirements, with the aim of delivering a replicable and defensible valuation and minimising audit and dispute risk.

This includes validating assumptions using both financial and non-financial KPIs.

Yes. For family law and litigation purposes, more than one valuation method must be applied, including:

• Income Approach (Capitalisation of Earnings)

• Discounted Cash Flow (DCF)

• Net Tangible Asset (NTA) or adjusted asset-based approaches

The appropriate methodology (or combination of methodologies) is determined during the scoping stage, based on the purpose of the valuation, the nature of the practice, and legal requirements.