Fair Value Determination in 2026: A Practical Guide

A valuation gap can turn an agreed exit into a shareholder dispute. One side relies on a recent funding round; the other says the rights attached to those shares make the price irrelevant. While the argument continues, the payment, transfer or transaction may remain unresolved.

Our firm advises and represents clients in valuation-related shareholder and commercial disputes. We identify the legal basis for the valuation, work with independent financial experts and present the evidence needed to support or challenge the resulting figure. The objective is a defensible position on the value the relevant law or agreement actually requires.

Start with the question the valuation must answer

The phrase “fair value” does not, by itself, identify the legal test. A financial-reporting measurement, a contractual exit price and a compensation claim can serve different purposes. Our firm identifies the purpose before instructing the expert.

The IFRS Foundation describes IFRS 13 as the standard that defines fair value and sets a measurement and disclosure framework where applicable IFRS Standards require or permit it. IFRS 13 uses an exit-price concept: the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The SEC filing describing the exit-price model illustrates a company disclosure under US GAAP’s ASC 820. Our firm first determines whether the dispute calls for an accounting measurement at all, or a different measure under the governing law or contract. We then define the relevant interest, valuation date and disputed rights for the expert’s instructions.

Compare the methods without confusing the categories

IFRS 13 describes three widely used approaches: market, cost and income. A discounted cash flow model is a technique within the income approach, rather than a separate fourth approach. The appropriate method depends on the asset, available information and applicable valuation purpose.

Approach	What it examines	What may need testing
Market	Prices and other information from relevant market transactions	Comparability, timing and rights attached to the interest
Income	Future amounts converted into a present amount	Forecasts, risk assumptions and discount rate
Cost	Current cost of replacing an asset’s service capacity	Obsolescence and whether the approach fits the asset

An asset-based analysis may be relevant to some businesses, but the expert must explain what it captures and why it answers the assigned question. Our firm reviews that explanation against the legal issue and the evidence. We challenge unsuitable comparisons and unsupported assumptions, with the expert explaining the financial effect of each disputed input.

The linked discussion of AVM tools for property valuation concerns automated property estimates. Such an estimate needs to be assessed against the property, data and valuation purpose before being used in a dispute. The discussion of appraisal for the Texas tax appeal process describes how a valuation supports a particular US property-tax challenge. Our firm defines the applicable legal basis for an Israeli shareholder claim.

Use the input hierarchy for its accounting purpose

IFRS 13’s fair value hierarchy classifies inputs. Level 1 concerns unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 concerns other qualifying observable inputs; Level 3 concerns unobservable inputs. The hierarchy gives priority to observable evidence, subject to the standard’s requirements.

A Level 3 measurement can be appropriate when relevant observable inputs are unavailable. For an unlisted business, significant inputs may need to be estimated. The important questions include how those estimates were developed, whether they reflect the applicable measurement basis and how changes affect the result. For proceedings, we separately assess the expert’s reasoning, independence and supporting evidence.

The SEC hierarchy disclosure illustrates a company’s use of hierarchy disclosures. The governing measurement requirements are in the IFRS 13 text. Our firm works with the financial expert to distinguish an accounting classification issue from an evidential weakness or an incorrect legal assumption.

Input level	Meaning	Evidence to examine
Level 1	Unadjusted quoted price for an identical item in an active market accessible at the measurement date	Identify the market, instrument and price date
Level 2	Other inputs observable directly or indirectly	Explain comparable prices, rates and any adjustments
Level 3	Unobservable inputs	Explain the market-participant assumptions, risk and sensitivity

Test the assumptions that drive the difference

Two reports may use the same model and reach very different conclusions because they assume different growth, margins, financing or risk. A sensitivity analysis can show which assumption accounts for most of the gap and whether the dispute concerns evidence, method or both.

We trace disputed forecasts to the records available at the relevant time, compare model versions and identify unexplained changes. The expert’s role is to assess the financial implications independently. Our role is to connect that analysis to the contractual or legal question and present a supported challenge where the opposing report goes wrong.

The distinction that expected return is not a promise is useful here: a projected outcome should not be treated as a certainty. Equally, an adverse later outcome should not automatically be substituted for the information available at the valuation date.

Distinguish a legal entitlement from an accounting number

In a shareholder exit, the governing documents and applicable law must be checked before deciding what interest is valued, when it is valued and whether a proposed adjustment is permitted. The answer can depend on the transaction and remedy. Our firm defines the valuation instructions around the applicable Israeli legal entitlement.

The academic discussion in Runi Law Review concerns valuations in tender offers. The appropriate valuation instructions depend on the operative legal framework and the facts of the transaction. Our firm examines the asserted entitlement, the transaction documents and the proposed valuation instructions before advising on a claim or response.

Where proceedings concern loss as well as value, we separate those questions. A valuation report may address the value of an interest without establishing every element of a compensation claim. The expert’s scope should match the issues that actually require financial evidence.

Valuation purpose	Legal work	Expert instruction
Contractual exit	Interpret the pricing clause and share rights	Value the specified interest on the agreed basis
Shareholder remedy	Identify the asserted right and applicable remedy	Address the interest, date and adjustments required
Compensation claim	Identify the loss claimed and disputed legal issues	Address financial loss on the stated assumptions
Financial reporting	Confirm the applicable reporting framework	Apply the measurement and disclosure requirements

Reconcile transaction evidence and later information

A recent transaction can be important evidence, but its price needs to be understood. Different share rights, transaction conditions or market circumstances may explain why it does not directly answer the valuation question.

IFRS 13 requires calibration in the circumstances described in paragraph 64: where the initial transaction price is fair value and a technique using unobservable inputs will measure fair value subsequently. The expert should explain how the model was calibrated and which later market data support a change.

Burford’s analysis of fair value disputes discusses the relationship between the 2025 IPEV guidelines and disputes, including the risk of hindsight. Our firm examines why later information is relevant to the particular valuation date and legal measure, and tests whether it supports a change to the assumptions used.

That review can expose a genuine inconsistency or explain an apparent one. If reliable evidence changes the analysis, the expert should address it transparently. Keeping an outdated assumption simply because it helps one party can weaken the report.

Prepare expert evidence that can withstand examination

A model is harder to assess when its sources, versions or instructions are missing. Disagreement about those matters can consume the proceedings before the parties reach the financial issue.

Our firm defines the expert’s legal instructions, organizes the relevant records and identifies the disputed assumptions for review. We examine the opposing report with the expert, prepare the questions that need an answer and present the legal significance of the evidence. The scope of expert work should reflect the issues and the value at stake.

The linked Israeli fair value assessment practice describes a valuation provider’s services. Financial valuation expertise and legal representation perform different roles. The expert must remain independent; counsel must ensure that the report addresses the right question and that its strengths and limitations are fairly presented.

Disputed matter	Review	Use in the case
Forecast	Compare contemporaneous records and model versions	Explain the supported range of outcomes
Comparable transaction	Review timing, rights and conditions	Assess whether the price is relevant
Discount rate	Identify risk assumptions with the expert	Test the effect on the result
Later evidence	Assess its relevance to the valuation date	Explain whether assumptions should change

Resolve the valuation issue before it controls the wider dispute

An unresolved valuation can delay an exit, prevent agreement on price or widen an existing shareholder conflict. Our firm can assess the governing mechanism, coordinate independent expert evidence, negotiate a resolution and represent the client in the appropriate proceedings.

Contact RNC Group to discuss the disputed valuation, the transaction or right involved, and the next decision that needs to be made.