Cross-Border and International Valuation and Forensic Accounting Services

Cross-border and international issues can arise in a wide range of valuation and forensic accounting engagements. Depending on the matter, our work may address:

• Valuation of foreign subsidiaries, joint ventures, or operations of a U.S. business
• Valuation of a foreign-owned or foreign-headquartered business or ownership interest
• Cross-border mergers, acquisitions, and other transactions
• International shareholder, partner, or joint-venture disputes
• Marital dissolution matters involving assets, income, or business interests located outside the United States
• Cross-border commercial disputes and international arbitration
• International estate, gift, and tax planning and compliance involving foreign assets or beneficiaries
• Investigations and forensic accounting analyses involving foreign entities, accounts, or transactions

Our valuation and forensic accounting professionals are qualified to perform engagements with cross-border and international dimensions and have provided these services in matters involving Europe, Asia, Africa, and Latin and South America. This experience includes valuing businesses and ownership interests with foreign operations, analyzing financial records maintained under different accounting frameworks, and coordinating with counsel, accountants, and other professionals located outside the United States.

While the specific countries and regions involved vary by engagement, our approach remains consistent: we identify the financial and valuation issues relevant to the matter, evaluate the available information, and apply recognized valuation and forensic accounting methodology to develop a well-supported and clearly explained analysis.

Valuing a business with foreign subsidiaries, branches, or joint ventures often requires analysis beyond that of a purely domestic engagement. Depending on the structure of the business, our analysis may address:

• Consolidation of foreign subsidiary results and intercompany eliminations
• Related-party and transfer-pricing arrangements between domestic and foreign entities
• Intercompany loans, guarantees, and cash-pooling arrangements
• Repatriation restrictions, currency controls, and foreign withholding taxes affecting cash flow available to owners
• Noncontrolling or minority interests held in foreign subsidiaries or joint ventures

These factors can affect the earnings, cash flow, and risk profile attributed to the foreign operations and, ultimately, the value of the business or ownership interest as a whole.

International Valuation Standards (IVS)

The International Valuation Standards, issued by the International Valuation Standards Council, provide a valuation framework applied in many jurisdictions outside the United States and are frequently referenced in cross-border transactions, disputes, and regulatory contexts. IVS addresses matters such as bases of value, valuation approaches, and reporting requirements, in some respects similar to U.S. standards such as SSVS and USPAP, though specific requirements and terminology may differ. Depending on the engagement, jurisdiction, and applicable requirements, our analysis may be performed under IVS, U.S. standards such as the AICPA's Statement on Standards for Valuation Services (SSVS) and the Uniform Standards of Professional Appraisal Practice (USPAP), or another applicable framework. Where a matter involves parties, counsel, or a tribunal in more than one jurisdiction, more than one set of standards may be relevant to the engagement.

Coordinating Between Standards

We identify the applicable standard, premise, and level of value for the jurisdiction and purpose of the engagement and, where relevant, coordinate with local counsel or professionals regarding requirements specific to a particular country or legal system. For additional information regarding the valuation standards we apply, see our comparison of business valuation professional standards.

Cross-border transactions can involve financial and valuation issues beyond those typically present in a domestic transaction. Depending on the engagement, our work may include:

• Purchase price allocation and valuation of tangible and intangible assets across jurisdictions
• Working capital analysis involving foreign currency accounts and local payment practices
• Analysis of earnout, escrow, and indemnification provisions in cross-border purchase agreements
• Consideration of foreign investment review, antitrust, or other regulatory approval requirements affecting deal timing and value
• Quality of earnings and financial due diligence involving foreign-prepared financial statements

Counsel and deal teams determine the legal and regulatory requirements applicable to a cross-border transaction; our role is to analyze the financial and valuation issues relevant to the purchase price, deal structure, and post-closing adjustments.

Marital dissolution and estate matters increasingly involve assets, income, or beneficiaries located outside the United States. Depending on the matter, our work may address:

• Valuation of foreign business interests, real property, and investment accounts
• Analysis of income and distributions from foreign trusts, entities, or family businesses
• Tracing of assets transferred to or held in foreign jurisdictions
• Currency translation and reporting of foreign account and asset values
• Coordination with foreign counsel, accountants, or fiduciaries regarding the availability and reliability of foreign financial information

Counsel determines the applicable jurisdiction, governing law, and legal treatment of foreign assets and beneficiaries; we analyze the financial and valuation issues relevant to those determinations.

Where the assets and the parties are domestic, the same work is described under business valuation in divorce and forensic accounting in divorce.

Cross-border commercial disputes are frequently resolved through international arbitration rather than litigation in a national court. We provide expert analysis and testimony in proceedings before arbitral institutions and tribunals, including matters involving contract disputes, investment treaty claims, and other cross-border commercial disagreements.

Our work in these matters may include quantifying damages or lost profits, analyzing the financial and economic assumptions underlying a claim or defense, and evaluating the report of another expert. We prepare our analysis and testimony to be understood by arbitrators, counsel, and other participants from a range of legal and professional backgrounds, regardless of the language, procedural rules, or evidentiary practices applicable to the proceeding.

The expert role generally, including reports, disclosures, and testimony, is described under litigation support.

International engagements often require additional analysis to address differences in currency, accounting frameworks, and available market information. Where relevant, our analysis may consider:

• Foreign currency translation and the effect of exchange-rate fluctuations on reported and normalized financial results
• Differences between U.S. GAAP, International Financial Reporting Standards (IFRS), and local accounting or tax-basis financial statements
• Country and political risk considerations relevant to the discount rate or capitalization rate
• Availability, reliability, and comparability of local market, industry, and transaction data
• Inflationary environments and their effect on historical and projected financial performance

These considerations are evaluated based on the facts of the engagement and are supported, to the extent possible, by relevant published data, market evidence, and other available information.

Forensic accounting engagements involving foreign entities, accounts, or transactions can present additional complexity in obtaining and analyzing the relevant financial information. Depending on the engagement, our work may include:

• Tracing funds, assets, and transactions across domestic and foreign entities and accounts
• Analyzing financial records maintained in a foreign currency, language, or accounting format
• Coordinating with local counsel, accountants, or investigators regarding the availability and collection of foreign records
• Evaluating financial information obtained through international discovery, letters rogatory, or other cross-border processes
• Identifying financial issues relevant to asset tracing, fraud, or other investigations involving foreign jurisdictions

The availability of financial records and the procedures for obtaining them can vary significantly by country. We work with counsel to understand these limitations and to develop an analysis based on the information that is available.

The collection, review, and transfer of financial records across borders can be subject to data-protection, banking-secrecy, or other laws that differ from those in the United States. Depending on the jurisdictions involved, these requirements may affect how financial information is gathered, transferred, stored, or produced in connection with an engagement.

We work with counsel to understand these requirements and to develop procedures for handling foreign financial information consistent with applicable law and any confidentiality obligations, while maintaining the integrity of the financial and valuation analysis.

Cross-border engagements often benefit from a coordinated team that includes U.S. and foreign counsel, local accountants or valuators, translators, and other professionals familiar with the relevant jurisdiction. We work within this team to perform the financial and valuation analysis while deferring to counsel on legal issues such as jurisdiction, applicable law, enforceability, and the legal effect of foreign records or proceedings.

Clear communication is particularly important in international engagements involving multiple advisors, languages, and professional traditions. Our reports and testimony are prepared to clearly explain the financial information considered, the analysis performed, and the basis for our conclusions.

Whether the matter involves a foreign subsidiary, an international dispute, cross-border forensic accounting, or another engagement with an international dimension, Insight Forensic & Valuation Services can assist. Contact our team to discuss the financial and valuation issues relevant to your matter and the experience our team can bring to an engagement involving Europe, Asia, Africa, or Latin and South America.