Try to create (broad outlines of) long-term scenarios that reflect the impact of Brexit on your company. For instance, consider what happens when the British pound’s exchange rate falls, if import levies rise, what effect do interest rates have, etc. Developing different scenarios at this early stage will make it easier to make an effective assessment of the consequences of Brexit.
Take into account fluctuations in valuations and the volatility of the market. This can be translated into an adjustment of the discount rate and changes in the valuation of, for instance, companies, real estate and pension moneys. An IPO will be riskier.
Determine the risk of exchange rate changes. We can see now that the British pound exchange rate will be subject to more volatility in the coming years. If there is ‘good’ news, the exchange rate increases, and vice versa. A company that is sensitive to fluctuations in the British pound’s exchange rate will want to hedge against that risk.
Higher transaction costs can already be taken into consideration. KPMG took stock of the impact of Brexit on 14 large clients and concluded that even without increased levies transaction costs in trade could increase by as much as 22%.
Take into account higher costs for customs duties. Without free trade agreement, Belgian exporters seeking to export to the UK will face customs duties.
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