Redbook UK Supplement

Question 1

What does GAAP stand for?

Answer 1

Generally Accepted Accountancy Principles

Question 2

What does IAS stand for?

Answer 2

International Accountancy Standards

Question 3

What is PS1?

Answer 3

Compliance with the RICS Redbook and regualtions

Question 4

What is PS2?

Answer 4

Ethics, Competency, Objectivity, and Disclosures

Question 5

What are the following:
- VPS 1
- VPS 2
- VPS 3
- VPS 4
- VPS 5

Answer 5

VPS 1: Minimum Terms of Enagagement
VPS 2: Inspections and Investigations
VPS 3: Minimum Contents of Valuation Reports
VPS 4: Bases of Value, Assumptions, and Special Assumptions
VPS 5: Valuation Approaches and Methods

Question 6

What is UK VPS 1?

Answer 6

Terms of Engagement

Question 7

What is UK VPS 2?

Answer 7

Terms of Engagement (Scotland)

Question 8

What is UK VPS 3?

Answer 8

Regulated Purposes and Governance Requirements

Question 9

What are the Bases of Value?

Answer 9

• Market Value
• Market Rent
• Investment Worth
• Synergistic Value
• Liquidation Value
• Equitable Value
• Fair Value

Question 10

What is UK VGPA 1?

Answer 10

Financial Reporting

Question 11

What is UK VGPA 2?

Answer 11

Other Regulated Purposes

Question 12

What is UK VGPA 8?

Answer 12

Charity Assets (Acquisition and Disposal)

Question 13

What is UK VGPA 9?

Answer 13

Relationship with Auditors

Question 14

What is UK VGPA 15?

Answer 14

Capital Taxation, being: CGT, IHT, SDLT, ATED

Question 15

What assumptions must be included in Capital Taxation valuations?

Answer 15

• Hypothetical sale
• Vendor is prudent and willing
• Valuation reflects the bid of Special Purchasers
• Considers prudent lotting
• All preliminary arrangements have been made
• The property is offered for sale by the most appropriate method of sale that will achieve the best price

Question 16

What “Other Regulated Purposes” are covered under UK VGPA 2?

Answer 16

• Financial Conduct Authority Approvals (Market Value)
• Take-overs and mergers (Market Value)
• Authorised Collective Investment Schemes (Market Value)
• Unauthorised & Unregulated Collective Investment Schemes (Market Value)

Question 17

What is covered under UK VPS 3?

Answer 17

Regulated Purposes Valuations (supplements PS2) of Real Estate in the UK.

• Financial Reporting
• Prospectuses & Circulars
• Investments Schemes
• Take-overs and Mergers

Question 18

What is the Basis of Value for Capital Taxation (VGPA 15)?

Answer 18

The price which the property might reasonably be expected to fetch if sold in the open market at that time but that price must not be assumed to be reduced on grounds that the whole property is to be place don the market at one and the same time.

Question 19

What is the definition of Fair Value (IFRS)?

Answer 19

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market sector participants at the measurement date.

Question 20

What are the Methods of Valuation?

Answer 20

• Comparable Method
• Investment Method
• Profits Method
• Residual Method
• Depreciated Replacement Costs Method

Question 21

What is are the Valuation Approaches (VPS 5)?

Answer 21

Market: comparing asset with similar assets.

Income: capitalisation or conversion of present and predicted income to produce a single current capital value.

Cost: based on the principle that a purchaser will pay no more for an asset than the cost to obtain one of equal utility otherwise.

Question 22

What is the hierarchy of evidence?

Answer 22

Category A: Direct Transactional Evidence

Category B: General Market Data

Category C: Other Sources