The system set out in IDW Standard 6 initially requires the report to confirm whether the company is in need of restructuring. A restructuring case exists precisely when the company is in danger of insolvency.
But even then, it may be a case of insolvency that can be quickly eliminated or it might be a company that is truly in need of reorganization. In order to precisely answer the question of the need for restructuring, the crisis stage of your company must be precisely recorded in the IDW S6 report. Is it only a case of an acute need for liquidity or is there a structural weakness in earnings? Is the strategic orientation of your company in line with the market? How are important decisions made in your company? What interests do the shareholders pursue? Which stakeholder interests shape the company? Are there differences between shareholders and management or between management and employees or employee representatives? What tensions underlie these differences?
Don’t be surprised if the expert does not immediately address the causes of the crisis that are obvious to you and first looks at the economic and legal starting position of your company in its market environment. The appraiser must take a holistic view of the crisis situation and the restructuring options. This is a requirement of IDW S6. For this purpose, it is indispensable to understand and present the company integrated in its environment. Incidentally, an important finding is whether the economic environment of your company would be missing something if your company ceased to exist or whether the services your company provides could be absorbed more or less seamlessly by competitors.
Companies that are in need of restructuring are not necessarily also capable of restructuring.