In general, the potential value attributable to the non-compete agreement when the undertaking is competing in a sector in which: the estimation of the value of a non-compete agreement is generally made by a fictitious determination of the value of the undertaking without a non-compete agreement. The result is then compared to the value otherwise determined in a fictitious market context or to the price paid in the case of an open market transaction, which is called with or without an approach. Non-compete rules generally refer to employees` individual good business based on their relationships with customers and employees, their knowledge of business management, and certain other factors that influence the value of the business. At Henry+Horne, we have a lot of experience in transactional consulting. According to the legal order, these accounting rules are specific standards2 according to which the purchaser must allocate the total purchase price paid in a business combination to the fair value of all tangible and identifiable intangible assets acquired (including the non-compete agreement). This gives stakeholders more information about the actual nature and cost of the acquisition. The third step is to determine the present value of the economic harm avoided during the non-compete period. . 3 The proposed new rules (i.e. Article 56(4) of the Law on income tax) have been in draft since 2003 (see www.cra-arc.gc.ca/tx/bsnss/tpcs/lf-vnts/sllng/rstrctv/menu-eng.html).

Since then, they have undergone several variations, but they are still in design form. . The “without” assumes that there is competition from the seller and uses projections based on this assumption. When determining forecasts, the analyst must understand that the direct approach is to determine the present value of potential future economic damage that would result directly from the non-application of a non-compete clause. The direct approach is a little simpler because it includes estimating the direct damage resulting from competition, usually in the form of a percentage of the shortfall. . . .