The creation of values is an economic process resulting from the interaction of market forces dominant amongst which are the forces of demand and supply; expressed in
monetary terms or figures for the benefit of the consumer of the report i.e. it is the determination of the value or worth of the interest subsisting in the property/assets.
Valuation can be carried out in respect of all types of landed properties and also in respect of other fixed and movable items such as items of plant and machinery, furniture, fittings and equipment, motor vehicles and other chattels.
Valuation exercise could be for the following purposes:
A mortgage is when an individual or corporate entity offers his/her property/assets as a collateral for a loan in a financial institution as a risk cover.
The financial institution always requests for a professional estate valuer’s opinion of value on the property/ assets being offered to enable them to take appropriate decision on the amount that can be given as loan. In this case, the services of a professional estate valuer are paramount and inevitable.
The opportunity to conveniently raise additional capital gives public quoted companies an edge as they become players in the capital market. The opportunity widens even now as Capital Market is becoming globalized and it is interesting to note that globalization of Capital Market is an irreversible process. Part of the process made necessary the existence of a globally acceptable standard of financial reporting that culminated in the birth of the International Financial Reporting Standards (IFRS).
Assets Valuation is relevant in the process of converting a business entity to International Financial Reporting Standards (IFRS) because it is an exercise which determines the value or worth of the interest that is subsisting in the property/ assets of such business. In this case, the total worth will be divided into a given number of shares which will then be listed in a brochure and marked to the public in capital market with global accessibility.
Before the consummation of an insurance contract, a figure has to be put forward as sum assured and this will form the basis of calculation of the premium to be paid and limit of claims. In the event of a total or partial destruction, a major question that must be asked therefore is: HOW MUCH SHOULD WE INSURE IT FOR? The answer lies in a professional valuation of the property/assets by competent valuer; which we are!