Retrospective CGT Valuation Evidence | IBV™

Collect financial statements, management accounts, budgets, board papers, customer agreements and borrowing records that existed at the relevant time. Record when each item was prepared and what period it describes. Ask which premises, staff, contracts and assets belonged to the subject then. Current ownership charts and present contract terms may not represent the historical business.

Where original management reports are unavailable, seek reconciliations from accounting records, bank activity or other contemporaneous documents. Mark reconstructed figures and explain the reconstruction method. Avoid filling gaps with present management confidence. A material uncertainty should lead to a stated limitation or further evidence request, rather than a precise conclusion whose foundation cannot be inspected.

A useful report includes a source chronology, historical ownership boundary and a clear distinction between contemporaneous assumptions and subsequent corroboration. It should explain why the selected method fits the evidence available at that date. This enables an adviser to test the valuation reasoning without confusing a report prepared today with knowledge that existed then.

A retrospective CGT valuation addresses an earlier effective date, even though the report is written now. Start by describing the business at that date: its activities, ownership, operating assets, customer relationships, premises and funding. A business that subsequently opened another branch or secured a major contract may be materially different from the subject that must be assessed historically.

Create a short chronology of structural changes. Record when an entity acquired equipment, when an owner joined or departed and when a contract started or ended. Distinguish documented dates from dates recalled by management. This chronology helps prevent present-day records from quietly changing the business boundary or the assumptions used for the earlier period.

The question is not simply what profit the business eventually made. It is what the relevant evidence supports about the business and expectations at the instructed date. The ATO's market valuation guidance emphasises information known or reasonably foreseeable at that time. Establishing that information set is central to the assignment, not an optional historical appendix.

Subsequent evidence needs a specific explanation. A later payment of an invoice outstanding at the date may help assess a condition that already existed. A customer contract won after the date may instead represent new business. The timing alone does not settle the question; examine what the later document actually demonstrates and whether it supports an earlier fact or introduces a later development.

Avoid using later success to rewrite a historical forecast as though the outcome was certain. The same caution applies to later failure. A business that lost a customer months afterwards was not necessarily expected to lose that customer at the valuation date. Evidence of negotiations, performance problems or a termination notice already existing then would need separate assessment.

Maintain a subsequent-information log showing the item, when it arose, what historical condition it may illuminate and how it has been used. This makes the treatment inspectable. It also helps the adviser distinguish a reasoned historical conclusion from a current assessment decorated with an old date.

This hypothetical example is not an IBV client matter. At the valuation date, a manufacturer had an approved budget supported by existing orders and documented production capacity. Six months later it secured a new customer through a tender that had not been contemplated in the budget. The resulting revenue increase should not automatically be incorporated into the earlier forecast.

Now change the facts: the later signed agreement followed advanced negotiations already documented at the date. That material may justify examining what market participants could reasonably have expected then, while still considering the uncertainty of completion. It does not mean the full later outcome was guaranteed. The relevant evidence and the assumptions drawn from it must be explained.

The lesson is to preserve the historical decision environment, not mechanically ignore every later document. Ask what was known, what was supportably foreseeable and which later facts genuinely corroborate that earlier position. Those distinctions are more useful than treating actual results as an unquestionable substitute for dated expectations.

Older files may be incomplete because systems changed, staff left or records were not retained in the same format. Identify the gaps early. A missing monthly management pack might be partly reconstructed from trial balances, bank records and invoices; an undocumented customer expectation may be much harder to substantiate. These are different evidence problems and should not receive the same generic assurance.

Reconcile reconstructed totals to available annual records and explain any unresolved difference. Document who prepared the reconstruction, when it was prepared and which original sources support it. Management recollection can help locate evidence or explain context, but should not silently become independently verified fact.

Some uncertainties may require sensitivity analysis, further information or a limitation on the conclusion. More decimal places cannot compensate for weak evidence. If a material issue cannot be resolved, the report should say so and explain its significance rather than present an apparently exact answer that depends on an invisible assumption.

A helpful final pack links the instruction, source chronology, financial reconciliations and assumptions. It should identify the report date and effective date separately and explain any use of later material. The adviser can then connect the valuation evidence to their own analysis of the relevant tax event without confusing commercial measurement with tax eligibility.

Before commissioning work, ask which historical documents are likely to be essential and whether material gaps affect the proposed scope. Preparing for a CGT valuation provides a practical organisation framework. Starting with the right dated evidence is more valuable than collecting a large folder that mainly describes today's business.

Ask your tax adviser to confirm the relevant event, valuation date and required interest; a valuation does not determine tax eligibility. See the retrospective valuation service and the central fees page. Standard delivery is 5–7 business days after complete information and a signed engagement are received.

This guide provides general information, not legal or tax advice. Examples are illustrative, not client cases or market benchmarks. Your adviser should confirm the requirements applicable to your transaction.