Going Concern Business Valuation in Costa Rica: Methods and Cases 2026

Going concern business valuation in Costa Rica is the technical study determining an operating business’s economic value considering its ability to generate future income, not just accounting asset value. This guide covers the three accepted methodologies (DCF, multiples, adjusted net assets), common 2026 CR cases, and how to structure a valuation defensible before bank, tax authority, or court.

What does “going concern” mean?

A going concern is a business that operates continuously generating income, with reasonable perspective of continuing. The going concern assumption implies that business value exceeds asset liquidation value — because team, clients, brand, processes, and cash flows are worth more than loose assets.

Contrasts with:

• Liquidation value — what’s recovered selling assets quickly
• Book value — what balance sheet says (historically adjusted)
• Asset market value — without considering operating capability

Three businesses with same book assets can have radically different going concern values based on income, margins, and growth.

The 3 main methodologies

1. DCF (Discounted Cash Flow) — intrinsic value

Projects future free cash flows and discounts to present value.

Basic formula:

Value = Σ (FCF year t / (1 + WACC)^t) + Terminal value

Where:

• FCF = Free Cash Flow = EBITDA − taxes − capex − working capital change
• WACC = Weighted Average Cost of Capital (debt + equity mix)
• Terminal value = business value after projection horizon (typical Gordon growth model)

CR example: Costa Rican SME hardware store

• Year 1 EBITDA: $180,000
• Projected 5-year growth: 8% annual
• Annual capex: $15,000 (equipment replacement)
• WACC: 14% (Costa Rican SME rate)
• Terminal g: 3%

DCF value ≈ $1,150,000

2. Market multiples (benchmarking)

Values business as multiple of some operating metric:

• EBITDA × multiple (most used)
• Revenue × multiple
• Net income × multiple (P/E)

Typical CR EBITDA multiples 2026:

3. Adjusted net assets

Adjusts accounting balance to real market value:

• Real estate at current appraisal value
• Machinery at market value (not book)
• Recognized intangibles (brands, clients, contracts)
• Hidden liabilities (labor, tax contingencies)

Useful for asset-intensive businesses (real estate, heavy industry, agriculture) or when DCF is difficult due to volatile flows.

Triangulation

Best practice is applying all 3 methods and triangulating. If they diverge significantly, investigate why:

• High DCF + low multiples = optimistic growth assumptions
• High assets + low DCF = operational inefficiency (unproductive assets)
• High multiples + low assets = brand/client-intensive business

Cases requiring going concern valuation

1. M&A (mergers and acquisitions)

Buyer and seller need defensible technical value. See our specific blog on M&A in CR SMEs.

2. Partner entry / exit

New partner contributes capital → needs to know % share. Partner exits → share buyback value.

3. Family succession

Previous generation transfers business to children. Valuation for:

• Equitable distribution among heirs
• Hacienda transfer tax
• Succession planning (trusts, holdings)

4. Divorce with business in marital community

Family Code requires valuing marital property — if business was created/grown during marriage, it applies.

5. Corporate litigation

Partner dispute reaching court. Designated appraiser values business to determine compensation.

6. IPO / bond issuance

Valuation prior to public offering at BNV or corporate bond issuance.

7. Corporate financing

Bank may require valuation as collateral for large corporate credit.

What a going concern valuation must include

Complete CFIA report contains:

1. Business identification: corporate name, legal ID, activity, years operating
2. Historical review: audited financial statements last 3-5 years
3. Sector analysis: trends, competition, risks
4. Internal analysis: clients, suppliers, employees, processes, assets
5. Basic due diligence: tax, labor, legal contingencies
6. Financial projections: 5 years with justified assumptions
7. Detailed DCF: FCF + WACC + terminal value
8. Applicable multiples: sectoral comparable benchmarking
9. Adjusted net asset value: market-adjusted balance
10. Results triangulation: reconciliation of 3 methods
11. Sensitivity analysis: ±10% in key assumptions
12. Conclusion: defensible value range
13. CFIA signature + appraiser credentials

CR 2026 WACC and discount rates

WACC varies significantly by company size and sector in Costa Rica:

CR WACC factors:

• Risk-free rate (BCCR bonds): ~8-10%
• CR market premium: 5-7%
• Size premium: 2-5% for SME
• Illiquidity premium: 10-25% (discount on gross value for non-listed shares)

Common errors in CR SME valuations

1. Using USA/Europe multiples without CR market adjustment (CR multiples usually 20-40% lower)
2. Projecting unrealistic growth (not every business grows 15% annual)
3. Ignoring working capital in DCF (growth consumes cash)
4. No fiscal due diligence (company may have hidden Hacienda liabilities)
5. Not applying illiquidity discount (SME shares don’t sell easily)
6. Relying on single method (always triangulate)

FAQ

Does my small family business need professional valuation? For important decisions (succession, sale, litigation), yes. For informal decisions (partner question), simple methods suffice. A CFIA appraiser can do valuation proportionate to size.

How long does going concern valuation take? Typical SME (1-3 locations, 10-50 employees): 20-45 days. Medium company with complex operations: 45-90 days.

How much does it cost? SME: $3,000-$8,000 USD. Medium: $8,000-$25,000. Large corporate: $25,000-$80,000+.

Does appraiser need access to financial statements? Yes, audited last 3-5 years plus operational details. Valuation quality depends on information quality.

Is it legal to value a company without consent? In judicial processes (divorce, corporate litigation) judge can order valuation with forced information access. Outside court, requires voluntary cooperation.

Is CFIA appraiser enough, or do I need CPA too? Depends. For comprehensive technical valuation, CFIA. For prior accounting audit, CPA. In large operations, both roles complement.

Professional scope

Ing. José Alberto Díaz Vidaurre is a CFIA-licensed certified appraiser (license ICO-3075) with recognized technical competence to appraise real estate, machinery, industrial equipment and tangible fixed assets that integrate the value of a going concern. Complementary financial components — DCF modeling with corporate assumptions, sector multiples analysis, accounting normalization, assumption audit — are executed in coordination with CPA auditors and corporate financial consultants. This combination delivers a technically defensible and legally sound valuation for the specific purpose (M&A, succession, corporate litigation, IFRS).

Conclusion

Valuing a going concern in Costa Rica is art and science. Technique (DCF, multiples, net assets) is international standard, but expert judgment on CR assumptions (local WACC, sectoral multiples, specific risks) differentiates a defensible valuation from one that doesn’t withstand scrutiny. For million-dollar decisions, hiring a CFIA appraiser with corporate experience is investment that pays.

Díaz Peritajes values going concerns across all sectors in Costa Rica, from SMEs to multi-location corporations. Nationwide coverage from Pérez Zeledón and Curridabat. Over 20 years coordinating with CPAs, tax attorneys, and M&A advisors. WhatsApp +506 7272-7270.