• Table 3: Commonly used valuation methods for selected securities

    Event or transaction description

    Legislative references
    and ATO guidance
    (not exhaustive)

    Selected valuation approaches (under certain circumstances)
    (This should not be taken as definitive guidance and will vary depending on the particular case. We recommend that you contact us to discuss the circumstances in more detail before seeking a ruling.)

    Off-market takeovers

    ITAA 1997:

    • subsection 124-800(1)
    • subsection 116-20(1)
    • subsection 124-790(1)
    • para 110-25(2)(b)
    • TD 2002/4

     

    From the time that the bid becomes unconditional, closing price at the time of acceptance, up to and including the deemed effective date of compulsory acquisition.

    Merger/scrip restructure via a scheme of arrangement

    ITAA 1997:

    • subsection 124-800(1)
    • subsection 116-20(1)
    • subsection 124-790(1)
    • para 110-25(2)(b)
    • subsection 124-780(5)

     

    1-day VWAP on implementation date of scheme.

    Demergers

    ITAA 1997:

    • section 125-70
    • section 125-80
    • TD 2006/73

     

    For cost base allocation – five-day VWAP from the commencement of trading.

    Equal capital reductions

    ITAA 1997:

    • subsection 116-30(3A)

     

    Closing price or 1-day VWAP or 5-day VWAP.

    Selective capital reductions

    ITAA 1997:

    • subsection 116-30(3A)

     

    Establishment of market value under ss 116-30(3A).

    Employee share acquisition schemes

    ITAA 1936:

    • former section 139FB

     

    Establishment of arm's length value under former s 139FB of the ITAA 1936 which has continued application under the IT(TP)A 1997.

    Off-market buy-backs

    ITAA 1936:

    • subsection 159GZZZQ(2)
    • section 159GZZZM
    • TD 2004/22
    • PS LA 2007/9

     

    Establishment of market value under ss 159GZZZQ(2) of the ITAA 1936.

    VWAP = volume weighted average price

      Last modified: 01 Jul 2015QC 21245