Guide to common business valuation methods used in Thailand

Key takeaways

• Business valuations in Thailand generally follow the International Valuation Standards and use the income, market and asset-based approaches.
• Most engagements use at least two methods, allowing the conclusion to be checked from another direction.
• A reliable valuation depends on well-supported inputs, including normalised forecasts, reinvestment needs, tax attributes, discount rates and net debt.
• The most suitable method depends on how the business earns money and the purpose for which the valuation will be used.
• Independent, well-documented work carries more weight when a valuation will be reviewed by auditors, regulators, tax authorities, buyers or other parties.

Table of contents

• Common business valuation methods used in Thailand
  • The income approach (discounted cash flow)
  • The market approach (comparable companies and transactions)
  • The asset-based approach (net asset value)
• How to calculate business valuation: the key variables
• Which business valuation method should I use for my company?
• The role of professional financial advisory services
  • Where internal valuations run into trouble
  • Business valuation support in Thailand from Forvis Mazars
• Conclusion
•  Frequently asked questions

Thai practice follows international convention. Most valuation work here is done by reference to the International Valuation Standards (IVS), which set out what value means in a given context and the three approaches used to get there.

Most engagements use at least two of them, so the answer can be checked from a second direction. Where one method is only a sense check rather than something we rely on, the report should say so and explain why. A reader should never have to guess which number is carrying the conclusion.

The income approach (discounted cash flow)

This approach values a business on the cash it is expected to generate. The usual version is the discounted cash flow, or DCF. You forecast the cash the business will throw off over the next five years or so, then discount it back into today’s money at a rate that reflects how risky that cash is. Everything beyond the forecast period is captured in a single terminal value, which often accounts for more than half the total.

Two things come up again and again on Thai engagements.

The first is the discount rate. Building one starts with the yield on Thai government bonds, adds a premium for the extra risk of owning shares rather than lending money, and adjusts for how volatile the sector is using data from listed companies. In many industries there simply are not enough comparable companies on the SET, so we look to regional peers instead. For a private company, two further layers go on top: a size premium, because smaller businesses carry more risk than large listed ones, and a company-specific premium for whatever is particular to that business — a turnaround plan that still has to be delivered, a handful of customers producing most of the revenue, dependence on imported supply. The cost of debt is set by what an SME in Thailand actually pays to borrow, not by what a listed corporate would pay.

The second matters more. The forecast has to be normalised, meaning cleaned up to show what the business would look like in someone else’s hands. In owner-managed companies you routinely find directors paying themselves well under a market salary, rent going to a property company the same family owns, or supplies bought through an affiliate. Fixing those usually shifts the valuation further than any argument about the discount rate.

The market approach (comparable companies and transactions)

This one values a business by looking at what similar businesses are worth. Multiples such as EV/EBITDA, price/earnings and price/book are taken from listed companies on the SET or mai, adjusted for differences in size, growth, profitability and debt, and then applied to the company being valued. The alternative is to use the multiples implied by prices actually paid in completed deals.

The problem in Thailand is data. Banking, energy, healthcare, food and retail have enough listed companies to work with. Plenty of other sectors do not, so the search widens to ASEAN or the rest of Asia-Pacific, and every step further out means more adjustment and less comfort. Private deal disclosure is thin as well. Thai transactions are usually announced without the target’s earnings, so transaction multiples tend to end up as a cross-check rather than the main answer.

The asset-based approach (net asset value)

Value the assets, subtract the liabilities, and what is left is the business. IVS calls this the cost approach. It works for holding companies, property vehicles, investment companies, and businesses that are closing down or earning less than their assets ought to produce.

Land and buildings normally need an independent property valuer. Where the valuation supports a filing involving a listed company, that valuer generally has to be on the SEC’s approved list, and the report has to be prepared for public use rather than kept as an internal reference.

For a profitable trading company, net asset value is a floor rather than an answer. A business earning more than its assets alone would justify is worth more than the sum of those assets, and only an income or market method will show it.

How to calculate business valuation: the key variables

There is no formula that turns a set of accounts into a value. Most of the work is gathering the inputs and then testing whether they hold up.

• Financial history and forecasts. Three to five years of accounts, audited if they exist, plus management accounts and the current-year budget. Where the audited and management numbers disagree, the reason usually tells you more than either figure does.
• Normalisation adjustments. Owner salaries, rent and purchases from related parties, one-off gains and losses, and assets sitting in the company that have nothing to do with trading, such as spare land or an investment property. Then the less obvious ones: profits from product lines that have since been dropped, one-off legal or marketing spend, tax refunds booked above EBITDA, bad debts nobody provided for. If due diligence has already produced an adjusted EBITDA, start the forecast from that rather than from the reported number.
• Reinvestment requirements. Capital expenditure and working capital. An EBITDA multiple makes a business look better than it is when that business has to keep spending heavily just to stay where it is. And where management has put one large spend in year one and nothing afterwards, spreading it across the forecast in line with how long the assets actually last is easier to defend than taking the budget as written.
• Tax attributes. Accumulated losses shelter future profits and are worth real money, but in Thailand they only last five accounting periods. A recovery that arrives in year four may find most of the shelter has already gone. That is a timing point the forecast has to deal with rather than ignore.
• Discount rate inputs. Risk-free rate, equity risk premium, beta, any size or company-specific premium, and the mix of debt and equity assumed behind it.
• Sector and macroeconomic conditions. Export exposure, tourism-linked demand, energy and labour costs, and BOI privileges, including the year they run out, because the tax rate that applies afterwards has to be in the forecast.
• Intangible assets. Brands, licences, customer relationships and contracts. In an acquisition, TFRS 3 requires these to be identified and valued in their own right rather than swept into goodwill.
• Net debt and debt-like items. Borrowings and accrued interest, loans from shareholders, deposits that will have to be returned, provisions for accrued leave and severance, and any tax the transaction itself triggers.

Which business valuation method should I use for my company?

It depends on how the business makes its money, and on what the valuation has to survive once it is finished.

• Established companies with a track record. Income approach in the lead, market multiples as a check. If the two are far apart, work out why before relying on either.
• Early-stage and high-growth businesses. The forecast is the problem. Where there is a credible plan, run a DCF across several scenarios. Where earnings are not meaningful yet, revenue multiples may be all there is. A single number implies a precision nobody has; a range, with the assumptions stated, is far more use to a board.
• Asset-heavy but profitable businesses — manufacturing, logistics, hotels, cold storage. A large balance sheet tempts people towards net asset value, but a profitable plant is worth what it earns. Lead with income and market methods and keep NAV as a floor and a sanity check. NAV only becomes the answer when the returns do not justify the assets tied up in the business.
• Property-holding and investment companies. Net asset value, built on independent appraisals of the underlying assets and adjusted for deferred tax on unrealised gains where that applies.
• Loss-making and wind-down situations. Net asset value based on what the assets would actually fetch, after disposal costs, tax, and severance under the Labour Protection Act — in a long-established Thai business, often the biggest single number on the list.
• Financial institutions and minority stakes. Dividend discount models, or price/book against comparable institutions.
• M&A and exits. Use at least two methods. A buyer, a lender and, in a listed deal, an independent financial advisor will each test the number their own way. A valuation that only holds up under one approach will not last long.

The role of professional financial advisory services

Where internal valuations run into trouble

An internal estimate is fine for planning and for managing expectations. It gets difficult when the number has to be accepted by someone who would prefer a different answer.

• Auditors. Goodwill impairment under TAS 36 and purchase price allocation under TFRS 3 both draw close attention. Expect the forecast, the discount rate and the identification of intangibles to be questioned as a matter of routine.
• The Revenue Department. Where shares or assets change hands for nothing, or below market price without good reason, the assessment officer can substitute market value under the Revenue Code. A valuation prepared at the time, and properly documented, is the practical defence.
• Capital markets regulation. Material and connected transactions involving listed companies may need an opinion from an independent financial advisor. Under the SEC’s revised rules, in force since 1 July 2026, an IFA opinion advising against a transaction lets shareholders holding 10% of the votes present block it. The valuation sitting behind that opinion now carries more weight than it used to.
• Disputes. In a shareholder or joint venture dispute, a valuation gets taken apart one assumption at a time. Whatever is unsupported is where the other side starts.

The problems that come up are rarely complicated. Forecasts that turn upward with no operational reason behind them. Terminal growth above long-run GDP. A terminal margin the business has never achieved quietly carrying most of the value, with nobody testing it. Discount rates that do not match the risk in the cash flows they are applied to. Discounts applied because they felt about right. Debt-like items left out of the net debt bridge. Non-operating assets counted twice.

Independence is structural rather than a matter of good intentions. A valuation carries weight because whoever prepared it has no stake in the assets and no fee riding on the answer. Where the report travels beyond the client, that should be clear on its face: it was prepared to be right, not to be useful to one side.

Business valuation support in Thailand from Forvis Mazars

Forvis Mazars provides Business valuation support in Thailand through its Financial Advisory practice. The Bangkok-based valuation team works under partner review and is supported by more than 400 professionals across audit and assurance, tax, legal, financial advisory and outsourcing in Thailand, as well as the wider Forvis Mazars network across more than 100 countries and territories.

The team values businesses for M&A and fundraising, handles purchase price allocation and goodwill impairment testing for financial reporting, values intangible assets, supports restructuring and carve-outs, works on litigation and disputes, and builds and reviews financial models. Recent engagements span manufacturing, logistics, district cooling, financial services, mining and natural resources, agriculture, retail and technology, for Thai and international clients alike.

The work follows generally accepted valuation principles, including the International Valuation Standards, and every engagement runs the same way. Plan the project and gather the information. Analyse the business and its market. Choose and apply the methodology, with sensitivity testing. Then report, reviewed by a partner before it goes out. Whether the output is a purchase price allocation for an audit or a full valuation behind a cross-border deal, the process does not change.

Conclusion

The method is not really the point. The point is a value that reflects how the business actually earns its money and that stays standing when someone with an opposing interest goes through it line by line. Companies that end up sold too cheaply, or valued too high for tax purposes, usually got there because one input went untested, not because someone picked the wrong approach.

If a valuation is going to be relied on by anyone other than you, it is worth having it prepared, or at least reviewed, by someone with nothing riding on the outcome.

FAQs

1. What are the standard business valuation methods used in Thailand?

Three approaches are in general use, and they follow the International Valuation Standards. The income approach, usually a discounted cash flow, values the business on the cash it will generate. The market approach compares it against listed peers or completed deals. The asset-based or cost approach works from the fair value of the net assets. Dividend discount models are also used for financial institutions and minority stakes. Most engagements use more than one, so the answer can be cross-checked.

2. How do I know which valuation methodology fits my business?

It depends on how the business makes its money and what the valuation is for. A company with a steady earnings record is usually valued on an income basis, with market multiples as a check. Property-holding vehicles and companies winding down are valued on net assets. Asset-heavy but profitable businesses are still valued on earnings, with net assets acting as a floor. Where the valuation supports a transaction or a regulatory filing, running two methods is standard.

3. Why can I not rely on an informal internal calculation?

For internal planning, you can. The difficulty is that internal valuations are prepared by people who already have a view on the answer, and they tend to fall apart once an auditor, a tax officer, a buyer’s advisers or opposing counsel start testing them. The usual weak points are growth nobody can justify, a discount rate that does not match the actual risk, and marketability or minority discounts applied without support. An independent valuation is documented from the outset to survive that kind of examination.

4. What valuation contexts does Forvis Mazars support in Thailand?

M&A and fundraising, purchase price allocation and goodwill impairment testing under TFRS, intangible asset valuation, group restructuring and carve-outs, shareholder and commercial disputes, tax-driven transfers, and financial modelling and model review. The work is delivered from Bangkok with partner-led review, backed by the wider Forvis Mazars network.