Importance The article reviews the most popular methods for result reconciliation in business valuation. Under international standards, income, cost and market approaches are used to value business. However, in different economic realities basic approaches provide different values. This fact enhances significantly the role of procedure for result reconciliation to determine the final value. Objectives The purpose of the study is to identify the most objective method for reconciliation of results, having the minimum degree of subjectivity. Methods I developed a mathematical model based on MS Excel to analyze financial statements of five large oil companies for 2011–2014 and calculate their value from the perspective of main approaches. When calculating the margin of error, I employed methods of applied statistics. Results I tested and analyzed the most common and mathematically sound methods to harmonize the results of major approaches to the final value, made conclusions about their degree of subjectivity and calculated the margin of error that occurs under different methods. I identified the most important advantages and disadvantages of the selected methods to be considered for different purposes of the valuation. Conclusions The study shows that in certain circumstances, the final company value strongly depends on the chosen method of reconciliation. The method based on questionnaires used by D&T turned out to be the most objective one and adapted to the economic conditions of Russia. Considering the specifics of each method enables to enhance the degree of objectivity of business valuation.
Keywords: fundamental value, valuation approach, costing, error, reconciliation
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