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APC > Valuation L1 > Flashcards

Valuation L1 Flashcards

1
Q

Tell me what are the 5 methods of valuation.

A
  1. Profits
  2. Residual
  3. Investments
  4. Comparable
  5. DRC (
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2
Q

Tell me about how you would value a building using the
profits/residual/investment/comparable/DRC method of
valuation.

A 
Profits -
Residual - 
Investments - 
Comparable - 
DRC -
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3
Q

What is PI Insurance (PII)?

A

x

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4
Q

Why do surveyors need PII?

A

x

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5
Q

Tell me about the RICS requirements in relation to PII.

A

x

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6
Q

What is run off cover?

A

x

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7
Q

What is the Red Book?

A

x

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8
Q

Why does the Red Book exist?

A

x

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9
Q

Tell me about a factor which may impact value.

A

x

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10
Q

What is your duty of care as a surveyor when undertaking a valuation?

A

x

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11
Q

Why is independence and objectivity important when valuing?

A

x

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12
Q

Is there a separate UK Red Book?

A

x

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13
Q

When was the Red Book last updated and what changes were made?

A

x

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14
Q

Which sections of the Red Book are mandatory and which are advisory?

A

x

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15
Q

What does PS1-2/VPS1-5/VPGAs relate to?

A

x

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16
Q

What type of advice does the Red Book cover?

A

x

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17
Q

If you provide preliminary advice / draft valuation report, what should you state in writing to your client?

A

x

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18
Q

What type of valuations might be relied upon by a third party?

A

x

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19
Q

Tell me what the definition of MR/MV/investment value/fair value?

A

x

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20
Q

What is the difference between an assumption and a special assumption?

A

x

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21
Q

What sources of information would you consider when preparing a valuation report?

A

x

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22
Q

If you have previously valued an asset, do you need to make any additional disclosures and what might they be?

A

x

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23
Q

If your firm is too small to have a rotation policy or valuation panel, what else can you do to ensure objectivity?

A

x

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24
Q

When might a conflict of interest exist in relation to a valuation instruction?

A

x

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25
Q

What must be included in your terms of engagement / valuation report?

A

x

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26
Q

What is a restricted valuation service and can you provide one?

A

x

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27
Q

How do you deal with limitations on inspection or analysis?

A

x

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28
Q

Can you revalue a property without inspecting?

A

x

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29
Q

What RICS guidance relates to the use of comparable evidence?

A

x

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30
Q

What is an internal valuer?

A

x

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31
Q

Can an external valuer provide an internal purposes valuation?

A

x

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32
Q

What happens if market conditions change between the valuation date and report date?

A

x

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33
Q

Is special value from a special purchaser reflected in MV?

A

x

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34
Q

Where does the definition of fair value come from?

A

x

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35
Q

Does fair value differ from MV?

A

x

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36
Q

When is fair value used?

A

x

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37
Q

What are the 3 approaches under VPS5?

A

x

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38
Q

What is the Valuer Registration Scheme?

A

x

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39
Q

Are there any instances where certain sections of the Red Book may not apply?

A

x

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40
Q

What is the basis of value under UK GAAP FRS 102?

A

x

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41
Q

What is a SORP?

A

x

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42
Q

What is the definition of EUV and when would you use it?

A

x

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43
Q

What additional criteria apply to secured lending valuations?

A

x

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44
Q

What information should you specifically request for a secured lending valuation?

A

x

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45
Q

What is a regulated purpose valuation?

A

x

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46
Q

What additional disclosures must be made for a regulated purpose valuation?

A

x

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47
Q

What is the basis of value for a statutory valuation?

A

x

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48
Q

What might a statutory valuation relate to?

A

x

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49
Q

What is the definition of the statutory basis of valuation?

A

x

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50
Q

What is a yield?

A

x

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51
Q

What is a Net Initial Yield?

A

x

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52
Q

What is a reversionary yield?

A

x

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53
Q

What is an equated yield?

A

x

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54
Q

What is an equivalent yield?

A

x

55
Q

How would a yield reported from auction differ from a Net Initial Yield?

A

x

56
Q

What purchaser’s costs do you deduct from a valuation?

A

x

57
Q

How would you value a property in uncertain market conditions - does the Red Book give any guidance?

A

x

58
Q

How could you value a long leasehold interest?

A

x

59
Q

How does a term and reversion and DCF differ?

A

x

60
Q

What is the difference between a growth explicit and a growth implicit yield?

A

x

61
Q

Give examples of each of these types of yield.

A

x

62
Q

How would you value an under/over rented investment property?

A

x

63
Q

When would you use a dual rate investment calculation?

A

x

64
Q

Where can you find yield evidence from?

A

x

65
Q

What is the hierarchy of evidence?

A

x

66
Q

What would you do if comparable evidence was limited?

A

x

67
Q

What is NPV?

A

x

68
Q

What is IRR?

A

x

69
Q

What is a term and reversion?

A

x

70
Q

What is a hardcore and topslice?

A

x

71
Q

What is a Discounted Cash Flow (DCF)?

A

x

72
Q

What is a short-cut DCF?

A

x

73
Q

When would you use a DCF?

A

x

74
Q

What are the advantages of a DCF?

A

x

75
Q

What are the disadvantages of a DCF?

A

x

76
Q

What is a YP/PV/YP in perpetuity?

A

x

77
Q

What is marriage value?

A

x

78
Q

When would you include an element of hope value in a valuation?

A

x

79
Q

How does market value differ to investment value/fair value?

A

x

80
Q

What is a dual capitalisation rate and when would you use one?

A

x

81
Q

Is the profits/DRC method used for specialised or specialist property?

A

x

82
Q

What type of properties would you use the profits method for?

A

x

83
Q

When would you use the profits method?

A

x

84
Q

What is intangible goodwill?

A

x

85
Q

What is turnover / gross profit / net profit?

A

x

86
Q

What are the steps to providing a profits valuation?

A

x

87
Q

What is Fair Maintainable Turnover?

A

x

88
Q

What is a Reasonably Efficient Operator?

A

x

89
Q

Does the assessment of the REO include personal goodwill and trading potential?

A

x

90
Q

What is personal goodwill?

A

x

91
Q

What is trading potential?

A

x

92
Q

How do you calculate the tenant’s proportion of rent in a profits valuation?

A

x

93
Q

What is EBITDA?

A

x

94
Q

What is Fair Maintainable Operating Profit?

A

x

95
Q

How do you calculate the divisible balance?

A

x

96
Q

What accounts information would you want to review for a profits valuation?

A

x

97
Q

Do RICS provide any guidance on RLVs or valuing development property?

A

x

98
Q

What is an RLV?

A

x

99
Q

What is a development appraisal?

A

x

100
Q

What is the basic process of undertaking a RLV/development appraisal?

A

x

101
Q

What does a development appraisal show?

A

x

102
Q

What are the key things you need to consider when appraising / inspecting a development site?

A

x

103
Q

Tell me about your due diligence when undertaking a

development appraisal.

A

x

104
Q

What sources of information do you use when undertaking a development appraisal?

A

x

105
Q

How can you assess development potential?

A

x

106
Q

What is GDV/NDV?

A

x

107
Q

How do you calculate GDV?

A

x

108
Q

What do development costs include?

A

x

109
Q

Where can you source build costs from?

A

x

110
Q

What are typical finance costs?

A

x

111
Q

What would you apply finance costs to and on what basis?

A

x

112
Q

What is an S curve?

A

x

113
Q

What do holding costs typically include?

A

x

114
Q

How do you typically calculate developer’s profit?

A

x

115
Q

What are some typical inputs (and %/£) in a RLV?

A

x

116
Q

What other criteria might be assessed in terms of performance measurement for a RLV?

A

x

117
Q

What are the advantages/disadvantages of a RLV?

A

x

118
Q

What is CIL?

A

x

119
Q

What is S106?

A

x

120
Q

What are the differences between CIL and S106?

A

x

121
Q

What is CIL charged on?

A

x

122
Q

What is a Monte Carlo simulation?

A

x

123
Q

What is a sensitivity analysis?

A

x

124
Q

How do you carry out a sensitivity analysis?

A

x

125
Q

Tell me about your understanding of incorporating affordable housing into development appraisals.

A

x

126
Q

What RICS guidance relates to the valuation of development property?

A

x

127
Q

How would you deal with depreciation/obsolescence?

A

x

128
Q

What types of obsolescence are there?

A

x

129
Q

What are the three ways to deal with depreciation?

A

x

130
Q

Is the cost approach a market valuation?

A

x

131
Q

How might onerous lease terms, e.g. restrictive user, break clause, impact upon capital or rental value?

A

x

132
Q

What liabilities may be created through valuation?

A

x

133
Q

What is a liability cap and when would one be used?

A

x

APC (35 decks)

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