Valuations For Financial Statements

Question 1

What document will help when doing a valuation for financial statements?

Answer 1

RICS Valuation - Global Standards 2017 - VPGA 1 (Valuation practice guidance applications)

Question 2

What basis of value should be adopted?

Answer 2

Fair Value

Question 3

What is the definition of fair value?

Answer 3

“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”

It is likely there would not be much difference between the reported figure for fair value and market value

Question 4

What valuation approach should be used for valuations for financial statements?

Answer 4

The market approach (the comparative method)

If market evidence isn’t available:

The income approach or a depreciated replacement cost approach may be used

Question 5

What standards will need to be adopted?

Answer 5

International Financial Reporting Standards

Question 6

What Guidance is available?

Answer 6

UK VPGA 1 - Valuation for financial reporting

Question 7

When are Valuations for financial reporting necessary?

Answer 7

. Takeovers

. Mergers

Question 8

What financial framework are listed companies in the UK required to apply?

Answer 8

The IFRS - international financial reporting standards