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Valuation Quizzes > Valuation Red Book Quiz > Flashcards

Valuation Red Book Quiz Flashcards

1
Q

All the UK sections of the red book issued separately to the global sections?

A
  • Yes
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2
Q

When was the UK red book last updated?

A
  • With affect from 14th of January 2019.
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3
Q

What is the full title of the red book?

A
  • RICS valuation global standards 2020.
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4
Q

When was the red book global laughed updated?

A
  • 31st of January 2020.​
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5
Q

What were the key changes to the red book in 2020 ?

A
  • IVS changes incorporated.
  • Now called Red Book Global.
  • Other minor changes to various section.
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6
Q

What does IVS stand for?

A
  • International valuation standards.
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7
Q

what sections of the global red book are mandatory?

A
  • PS1- 2.
  • VPS 1- 5.
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8
Q

What does PS1 relate to?

A
  • Compliance with standards where a written valuation is provided .
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9
Q

What does the red book apply to?

A
  • Written valuation advice.
  • AVM who derived output.
  • Oral valuation advice (to the fullest extent possible).
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10
Q

Which of these are accepted valuations under PS1?

A
  • Agency or brokerage advice [not a purchase report].
  • Internal purposes.
  • In the course of negotiations stroke litigation.
  • Acting as an expert witness.
  • Statutory functions.
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11
Q

Which sections of the red book the accepted valuations not have to comply with?

A
  • VPS 1- 5.
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12
Q

Can an external valuer provide an internal purpose valuation?

A
  • Yes.
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13
Q

What does PS2 relate to?

A
  • Ethics, competency, objectivity and disclosures .
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14
Q

Which of these do you need to satisfy in order to be competent to provide a valuation?

A
  • appropriate qualifications.
  • Membership of a professional body demonstrating ethical standards .
  • Sufficient local knowledge .
  • Compliance with your country’s legal regulations.
  • Where applicable compliance with the RICS valuer registration requirements.
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15
Q

If you decide to provide preliminary advice or a draught valuation report what should you state in writing?

A
  • That your opinion is provisional and subject to completion of the final report.
  • That your advice is provided for the client’s internal purposes only .
  • That any draught is on no account to be published or disclosed .
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16
Q

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

A
  • Published financial statement.
  • Takeovers or mergers.
  • Stock Exchange or similar body.
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17
Q

If you have previously valued an asset for any purpose what additional disclosures must you make?

A
  • Relationship with the client and previous involvement.
  • Proportion of face.
  • Rotation policy.
  • Time as signatory .
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18
Q

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

A
  • Seven yearly review by another member .
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19
Q

Could a conflict of interest exist if you or your firm have been involved with the asset during the last 12 months?

A
  • Yes.
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20
Q

In relation to the proportion of fees additional disclosure what would a significant amount be considered as?

A
  • 5- 25%.
21
Q

What does VPS1 relates to?

A
  • Terms of engagement [scope of work].
22
Q

Do your terms of engagement have to be in writing ?

A
  • Yes.
23
Q

Can the valuation date be different to the report dates?

A
  • Yes.
24
Q

Can you provide a restricted valuation service?

A
  • Yes- if it is reasonable with regard to the purpose and subject to appropriate conditions.
25
Q

What is an assumption?

A
  • Something that is reasonable to accept as fact without specific investigation or verification .
26
Q

What is a special assumption ?

A
  • Something that assumes facts that differ from the actual facts existing at the valuation date or that would not be made by a typical market participant in a transaction on the valuation date.
27
Q

what does VPS2 relate to?

A
  • Inspections, investigations and records
28
Q

How can you deal with limitations or restrictions on inspection, inquiry or analysis?

A
  • Record them in your terms of engagement and report .
29
Q

Can you revalue a property without re inspecting?

A
  • Yes - providing there has been no material changes to the property .
30
Q

What does the VPS3 relate to?

A
  • Valuation reports.
31
Q

What is an internal valuer?

A
  • I value who is in employment of either the enterprise that owns the assets, or the accounting firm responsible for preparing the enterprises Financial records and / or reports .
32
Q

What should you do if market conditions change between the valuation date and date of the report?

A
  • Comment that values change overtime .
  • Draw attention to this.
33
Q

What does VPS4 relate to?

A
  • Basis of value, assumptions and special assumptions .
34
Q

What are the bases of value recognised under the red book?

A
  • Market value.
  • Market rent.
  • Investment value [worth].
  • Fair value.
35
Q

What is market value?

A
  • The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arms length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion .
36
Q

Should you reflect special value [from a special purchaser, not a general market expectation] oh marriage value in market value?

A
  • No.
37
Q

What is market rent?

A
  • The estimated amount for which an interest in real property should be leased on the valuation date between a winning less or and a willing lessee or appropriate lease terms in an arms length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.
38
Q

What is investment value open brackets worth close brackets?

A
  • The value of an asset to a particular owner or perspective owner for individual investment or operational objectives .
39
Q

What is fair value?

A
  • The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurements date.
40
Q

Where does the fair value definition come from?

A
  • IFRS 13.
41
Q

is there generally any difference between market value and fair value?

A
  • No.
42
Q

When would fair value generally be used?

A
  • In financial statement valuations.
43
Q

Can you refer to forced sale value?

A
  • Valuation approaches and methods.
44
Q

What is the cost approach?

A
  • Based on the economic principle that I purchaser or pay no more foreign asset than the cost to obtain one of equal utility whether by purchase or construction .
45
Q

What is the market approach?

A
  • Based on comparing the subject assets with identical or similar assets open brackets or liabilities] for which price information is available, such as a comparison with market transactions in the same, or closely similar, type of asset [or liability] within an appropriate time horizon.
46
Q

What is the income approach?

A
  • Based on capitalization or conversion of present and predicted income [cash flows], which may take a number of different forms, to produce a single current capital value.
47
Q

How do are RICS regulate valuation work?

A
  • Valuer registration scheme [VRS].
48
Q

Do you have to pay to become a registered valuer?

A
  • Yes.

Valuation Quizzes (8 decks)

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