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Forensic Valuation of Seperating Partnership

A partnership split, and how to divide it

Two accountants entered into partnership, operated an accountancy practice with one office. Over time, they acquired more practices and offices and incorporated the business into a limited company structure. Eventually the partners fell out and agreed to divide equally the business and net assets, including good will. However, they took different approaches to the valuation – one as a multiple fee basis, the other as a multiple of profits.

In a pre-litigation phase, we were appointed on a single joint expert basis to give an independent assessment on the alternative valuations and which methodology should be applied, and the balancing adjustment arising on separating the practices.

We concluded that the valuations were very close on the alternative basis, but that the division of goodwill was markedly different between the two. We reached an independent opinion on which method was appropriate in the circumstance, and the settlement balance due.

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