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Applied Valuation

The document discusses valuation principles and processes. It defines market value as the estimated sale price of an asset between a willing buyer and seller. Valuation is needed for various purposes like property sales, loans, insurance, and taxation. The valuation process involves defining the problem, inspecting the property, collecting comparable market data, analyzing the data, determining the property's highest and best use, applying valuation approaches, and issuing a final value opinion. Only registered valuers who have passed certification exams and gained practical experience can legally conduct valuations.

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Irfan ZaKi
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592 views1 page

Applied Valuation

The document discusses valuation principles and processes. It defines market value as the estimated sale price of an asset between a willing buyer and seller. Valuation is needed for various purposes like property sales, loans, insurance, and taxation. The valuation process involves defining the problem, inspecting the property, collecting comparable market data, analyzing the data, determining the property's highest and best use, applying valuation approaches, and issuing a final value opinion. Only registered valuers who have passed certification exams and gained practical experience can legally conduct valuations.

Uploaded by

Irfan ZaKi
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
  • Revisiting Valuation Principle

Chapter 1 : Revisiting Valuation Principle

Characteristic of Property Market   Date of Valuation  


 High cost of transfer   Market value is defined as the estimated amount for which as 
 Hetero geneity (2 property never have same value)  asset should exchange on the date of valuation between a 
 Indivisibility (Difficult to be divided)  willing buyer and willing seller in an arm’s length transaction 
 Special problem of management  offer proper market (Many potential buyers) wherein  the 
 Special risk  parties had each acted knowledgeably, prudently and without 
 Perpetuity (Permanent)  compulsion. 
 Imperfect knowledge (Difficult to get info about property)   
 Decentralised market (No specific place to sell property)   
 Government interaction  Process of Valuation  
   Definition of the problem : Purpose of the valuation, date of 
opinion of value, characteristics of property, assumption, 
Why The Valuation is Exists?   hypothetical conditions. 
 For sale and purchase   Scope of work : Inspection and survey of the property. 
 For loan security and sale by public auction   Data collection and property description : Market area data, 
 For insurance  subject property data, comparable property data. 
 For company account and financial statement (Asset report)   Data analysis : Market analysis, highest and best use analysis. 
 For compulsory acquisition (If government want to buy our   Land value opinion 
property)   Application of the approaches to value 
 For rating purpose (Tax)   Reconciliation of value indication and final opinion of value 
   Report of defined value 

What is Valuation?  
 It is an assumption opinions as to capital or rental value on any 
given basis in respect of an interest in property with or without 
any assumptions or qualification (Manual of valuation standards) 

Who Can Conduct Valuation?  


 In the Valuers, Appraisers and Estate Agents Act 1981 (Act 242) 
and rules clearly stated that the applicator should comply with 
the following conditions : 
 
Level 1 : Probationary Valuer 
 A person who has passed the exams prescribed by the Board 
or has qualification which the Board recognise as equivalent to 
such exams may apply to the Board to be registered as 
Probationary Valuer. 
 
Level 2 : Registered Valuer 
 A person shall be required to obtain the practical experiences 
and to pass the Test of Professional Competence prescribed by 
the Board or any equivalent test of exam recognised by the 
Board. 
 A person has attained age of 21 years old, sound mind, good 
characteristics and has not convicted of any offence involving 
fraud or dishonesty or moral turpitude during the 5 years 
immediately proceeding the date of his application (Make a 
declaration in the form and manner prescribed by the Board) 
 Not under suspension from valuation or estate agency 
practices nor has his name been cancelled from the Register of 
Valuer and Appraiser. 
 

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