How to record a valuation

From each jurisdiction company valuations may differ, this support article is here to assist in how to add these onto Capdesk

You can record all company valuations on the Valuations page e.g. Average Market Value (AMV) / Unrestricted Market Value (UMV).

To find more information on the types of valuations we offer, please contact our support team here.

n.b. You can find a step by step interactive product demo tour here.

How to add a valuation

How to modify / delete a valuation

Types of valuations supported

How to add a valuation

You can access this by clicking on the “Shares” tab -> “Valuations” header -> green button “Add Valuation”.

You will then be directed to the page where you input the valuation details.

How to modify / delete a valuation

You can modify the details of a valuation by clicking on the three dotted action button ''...'' on the far right of the screen relevant to the valuation and select Modify.

Please note, once added, you will only be able to modify the currency and the share price or add/change documents and notes.

If you need to change any other details, you will need to re-add it using the new details and then delete (deprecate) the initial valuation.

In order to delete a valuation, click on the three dotted action button ''...'' on the far right of the screen relevant to the valuation and select Deprecate.

Types of valuations supported

We currently allow you to record the following valuations for UK jurisdiction:

1. AMV / UMV (you will need to add them individually)
2. Fair value
3. Share price
4. Public valuation
5. 409A valuation

1. AMV and UMV

When you select "Type" as AMV or UMV and you will need to input the following:

• Valuation Date - the date of the valuation.
• Days valid for - For how long is the valuation valid? Typically, EMI valuations are valid for 90 days, while CSOP valuations are valid for 30 days. Check the terms of the valuation letter from HMRC to see how many days the valuation is valid for.
• Share Class - choose what share class your valuation falls under e.g. Ordinary. You can find out more about how to create a share class here.
• Currency - you can select the currency of the valuation
• Share Price 

“Advanced”:

• “Agreed with Authorities” - tick if the valuation has been agreed with the authorities.

“Notes and Documents” - you can include any notes and upload documents.

Once you have filled the valuation details, click on Save.

Once you have created your valuation, they will appear on the “Valuation” page.

2. Fair value:

The fair value is required for the share-based payment report.

A fair value valuation is used as a certainty of the market value of an asset for which a market price cannot be determined. It can also be used for the expense of vested options.

Capdesk currently only supports Merton extended Black-Scholes formula as well as the Black-Scholes model without dividend yield.

A fair value valuation is used as a certainty of the market value of an asset for which a market price cannot be determined. It can also be used for the expense of vested options.

You can find out more about share based payments valuations here.

You will need to input:

• Valuation date: date of the valuation
• Dividend yield: a dividend expressed as a percentage of a current share price. (We also support a Black-Scholes report without dividends, you can do this by changing the valuation model)
• Spot price: the current share price
• Risk-free interest rate: the return on the investment as a %
• Volatility: the rate at which the price of a security increases or decreases for a given set of returns as a percentage.

These are all used as input parameters for the Black Scholes model. 

3. Share price:

This is required for the share-based payment report and recording phantom shares.

The share price is to help indicate the current market price of the shares. It is important to note that the options granted on this date or after will have this share price attached to them until a more recent valuation is added. You can view this share price on a specific option grant by navigating back to the options page and then clicking on the option grant itself.

You will need to input: 

• Jurisdiction: The jurisdiction of the valuation. Some valuations are specific to certain jurisdictions. For instance, in UK jurisdictions, AMV and UMV valuations are used for grant valuations, while 409A valuations are used in the US. If you intend to create a "Public Valuation", which has no legal or tax effect, jurisdiction has no effect and may be left blank.
• Valuation date: Date of valuation
• Share class: the corresponding share class. Please note you will need to input a different valuation for each specific share class.
• Currency: Currency of the share price
• Share price

4. Public valuation:

Public valuation is used to show stakeholders the value of their investment.

You can find more detail on the public valuation here.

For a public valuation, you will need to input: 

• Type: The type of valuation, please input public valuation
• Valuation date: Date of valuation 
• Currency: Currency of valuation 
• Share price

5. 409A valuations: 

For US based grants, 409A valuations are required.

You would simply need to input the jurisdiction as the United States then select 409A as the valuation type.

You then need to input:

• Valuation date: Date of valuation
• Share class: the corresponding share class
• Currency: Currency of the share price
• Share price