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Article 26
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The text of an opinion which an expert issues based on the value of its own estimation of the object under review shall specify, as a minimum:
- value criterion and value premise;
- record date of evaluation;
- material assumptions and restrictions applied;
- reasons for employing the appraisal or valuation method and related parameters employed, and process of calculation;
- adjustments, analyses, and determinations made;
- information used and its sources, for example CPA-audited financial statements, Market Observation Post System, databases etc. Whether the evaluation procedure and information are appropriate and reasonable shall be indicated if information is sourced from the internal information of the principal or object under review which has not been verified by an impartial third party, for example the expert’s own unaudited figures and prospective financial information etc. ;
- final value or value interval;
- conclusions of opinions: comparison between the contents of engagement, for example the estimated transaction price or share exchange ratio, acquisition price etc. of the object under review, and the final value or value interval, and express opinion on the relevant reasonableness.
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Article 27
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The text shall, in addition to disclosing the above in accordance with the preceding article, specify the following as a minimum if the object under review being appraised by an expert is an equity, the value of an enterprise, a share exchange ratio, an intangible asset or its right-of-use assets:
- historical financial information of the object under review.
- the following if the valuation method adopts the income approach:
- management’s projections of the future performance of the object under review (for example, analyses of the business cycle and market situation of the industry etc.), and reasons.
- assumptions of key factors concerning prospective financial information, and reasons.
- extrapolated number of periods of future income (forecast period and permanent period) .
- future benefit flow and basis of calculation of future value.
- sources and process of creation of primary parameters such as discount rate, capitalization rate etc. .
- bases and reasons for adjustments to value premiums and discounts.
- preliminary estimates of value and value interval.
- the following if the valuation method adopts the income approach:
- comparable company or comparable transaction selected and conditions of selection.
- selection, calculation, and adjustment of value multiples, and reasons for application and adjustment.
- bases and reasons for adjustments to value premiums and discounts.
- preliminary estimates of value and value interval.
- general analysis, adjustment, and description of the difference between the preliminary value or value interval derived from different valuation methods, including specific reasons taken into account for employing a particular valuation and its weight if each of the above valuation methods has a different or the same weight; and the necessary analysis and description if no adjustment is possible.
- in the event of a public tender offer, where the reasonableness of the consideration is evaluated based on the premium interval of previous public tender offers of a certain period, the previous public tender offers selected, and specific reasons for such selection, with consideration given to the reasonableness of the selection.
- at least the following disclosures as required by Article 13, paragraph 2 of the Regulations Governing Information to be Published in Public Tender Offer Prospectuses if the expert issues its opinion in accordance with said article:
- method, principles, or calculation method for the pricing of the public tender offer, and comparison among market value approach, cost approach, and discounted cash flow in international convention.
- comparison of the financial condition, profit earning, and price-to-earning ratio between the acquired company and TWSE- or TPEx-listed companies in the same industry.
- contents and conclusions of an appraisal report of an appraisal institution on which report the tender offer price is drawn.
- impact assessment on the soundness of the finance and business of the acquired company or surviving company, if an asset or share of the acquired company or surviving company is provided as collateral of the offeror’s financing plan.
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