Valuation VPS 3 / Valuation VGPA 1 Flashcards
What is Market Value?
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 arm’s length transaction after proper marketing, where the parties acted knowledgeably, prudently, and without compulsion.
What is Market Rent?
The estimated amount for which an interest in real property should be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction after proper marketing, where the parties acted knowledgeably, prudently, and without compulsion.
What is Fair Value (IFRS13)?
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 measurement date.
This basis of valuation is required if the International Financial Reporting Standards have been adopted by the client.
What is Investment Value?
The value of an asset to a particular owner or prospective owner for individual investment or operational objectives, which may differ from Market Value.
What is Equitable Value (IVS 104)?
The estimated price for the transfer of an asset or liability between identified knowledgeable and willing parties.
Not used in the UK.
What is Liquidation Value?
The basis of value can be used for a group of assets sold in a piecemeal basis considering the costs of getting the assets into a saleable condition.
Not used in the UK.
What is the responsibility of valuers regarding valuation approaches?
Valuers are responsible for choosing and justifying their valuation approach and use of model, and in some cases, more than one approach may be appropriate.
What is VPGA 1?
Valuation for inclusion in financial accounts, where Fair Value will be adopted for all IFRS adopted accounts and prescribed performance standards must be adhered to.
What does VPGA 2 address?
Valuations for secured lending, dealing with conflicts of interest for secured lending valuations, requiring disclosure of any previous, current, or anticipated involvement with the prospective borrower or property to be valued.
What is the definition of ‘previous involvement’ in VPGA 2?
‘Previous involvement’ is defined as normally being within the past TWO years, but under certain circumstances, it can be longer.
What must be recorded in writing if a potential conflict can be avoided?
Any arrangements to manage the instruction must be recorded in writing and included in the terms of engagement and valuation report.
