The starting principle
A retrospective valuation has the same purpose as a current valuation, to establish market value at a specific date. The difference is the date is in the past. That means hindsight is unavailable, post-date market data cannot be relied upon, and the evidentiary base is bounded by what was reasonably knowable at the time. A valuer cannot use what they now know about how the business performed in the years since the valuation date.
What this changes in practice
First, financial evidence must be contemporaneous. Financial statements for the valuation year and prior years can be relied upon; later years cannot. Second, market multiples and comparable transactions must be those that were observable around the valuation date: not current multiples that may reflect different market conditions. Third, industry conditions, regulatory environment and forecast assumptions must reflect what was reasonably understood at the time. Fourth, any material event after the valuation date (a customer loss, a regulatory change, a market shift) is excluded.
Why this matters for the supportable range
Retrospective valuations often have a narrower supportable range than current valuations: because the evidence base is constrained. Multiples available for the relevant period may be limited. Industry data may be thinner. Forecast information at the date may be less detailed than current management reporting. The methodology can still produce a defensible conclusion, but the range across methodologies may be tighter and the conservative position more likely.
What documents we need for retrospective engagements
In addition to the standard document set, we need contemporaneous evidence: financial statements as at the historical date, industry reports current at the date, comparable transaction data from the period, records of what was known to management at the time (board papers, forecasts, strategic plans), and ASIC/legal records showing the entity structure at the date. Where this evidence is thin, we adopt conservative assumptions and document the limitations.
What retrospective valuations cannot do
A retrospective valuation cannot substantiate a position that the contemporaneous evidence did not support. We will not adopt a current-day understanding of value to a historical date. We will not use post-date events to retroactively strengthen a position. Where the historical evidence is insufficient to form a confident conclusion, we say so: and adopt conservative assumptions with limitations clearly stated in the report.
Why people commission retrospective valuations
Common reasons: amended assessments where the original value applied is questioned and a substantiated value is required; historical CGT events where market value substitution applies and the value at the historical date was not properly documented; estate matters where the deceased held private business interests and probate value or post-death cost base needs to be established; small business CGT concession claims for past disposals; and deemed disposal events triggered by changes in residency or trust resettlements.