Article by by Robert Gladstone MA Land Economy, (FRICS)
Forest and Agriculture Asset Valuations: The fundamentals of RICS Valuation – Global Standards (incorporating the ‘International Valuation Standards’ IVS)
The international Valuation Standards (IVS) form the key guidance for valuation professionals globally and underpin consistency, transparency and confidence in valuations.
Valuations are widely used and relied upon in financial, alternative investment and asset management markets, whether for inclusion in financial statements, for regulatory compliance or to support secured lending and transactional activity.
The IVS are standards for undertaking valuation assignments using generally recognised concepts and principles that promote transparency and consistency in valuation practice.
Our Chartered Surveyors undertake a wide range of valuations, which comply with International Valuation Standard (IVS). We rely on the mandatory rules and best practice guidelines contained in the Royal Institution of Chartered Surveyors (RICS) RICS Valuation – Global Standards.
The most common valuation basis is the ‘Market Approach’ (IVS 400 Real Property Interest), commonly referred as Market Value (MV) and is defined as “The estimated amount for which a property should exchange on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”
Following this approach, we normally undertake valuations using “the comparative method”. We analyse known sales of similar properties and compare this data against the property to be valued.
In the case of existing businesses and business interests (IVS 200 Businesses and Business Interests) Other approaches may include ‘Income Approach’ and ‘Cost Approach’. These tend to be less common.
We would be delighted to discuss your valuation needs. We would stress that it is vital that we have a clear understanding of the client’s requirements and the purpose of the valuation. Before any valuation work is undertaken we would confirm our terms of engagement and the scope and purpose of the valuation.
