Search results

1 – 10 of over 18000
Click here to view access options
Article
Publication date: 26 July 2018

Nick French and Laura Gabrielli

Since the global financial economic crisis hit the world markets in 2007/2008, the role of property valuation has been under greater and greater scrutiny. The process of

Abstract

Purpose

Since the global financial economic crisis hit the world markets in 2007/2008, the role of property valuation has been under greater and greater scrutiny. The process of valuation and its quality assurance has been addressed by the higher prominence of the International Valuation Standards Council (IVSC). This is a significant initiative worldwide. However, there has been little written on the appropriate use of valuation approaches and methods in market valuations. There is now a hierarchy of valuation definitions. In order, there are valuation approaches, valuation methods and, as a subset of the methods, techniques or models. The purpose of this paper is to look at the importance of identifying the appropriate approach to be adopted in market valuations and the methods, techniques and models that should be applied to determine market value.

Design/methodology/approach

This practice briefing is an overview of the valuation approaches, methods and models available to the valuer and comments on the appropriateness of valuation each in assessing market value.

Findings

This paper reviews the IVSC-recognised approaches and prompts the valuer to be careful with the semantics involved so that they are better placed to provide an unambiguous service to their clients.

Practical implications

The role of the valuer in practice is to identify the appropriate approach for the valuation of the subject property, choose the right method and then apply the correct mathematical model for the valuation task in hand.

Originality/value

This provides guidance on how valuations can be presented to the client in accordance with the International Valuation Standards.

Details

Journal of Property Investment & Finance, vol. 36 no. 4
Type: Research Article
ISSN: 1463-578X

Keywords

Click here to view access options
Article
Publication date: 1 December 2004

Nick French

Provides a brief overview of the methods that used in real estate valuation with a particular emphasis on the valuation of specialised property. Proposes that the…

Downloads
8412

Abstract

Provides a brief overview of the methods that used in real estate valuation with a particular emphasis on the valuation of specialised property. Proposes that the underlying requirement is to estimate market value and that the role of the valuer is to choose the method that is the best model to achieve this objective. Concludes that a valuer must work with the recognised techniques and, in the case of specialised property, these are methods that go back to analysing value from first principles by identifying the value of the property to the business.

Details

Journal of Property Investment & Finance, vol. 22 no. 6
Type: Research Article
ISSN: 1463-578X

Keywords

Click here to view access options
Article
Publication date: 14 August 2007

Nick French and Laura Gabrielli

In January 2005, the International Valuation Standards Committee (IVSC) published the International Valuation Guidance Note No. 8 entitled The Cost Approach for Financial

Downloads
2397

Abstract

Purpose

In January 2005, the International Valuation Standards Committee (IVSC) published the International Valuation Guidance Note No. 8 entitled The Cost Approach for Financial Reporting – (DRC). This guidance note provides background to the use of depreciated replacement cost (DRC) in connection with International Valuation Application 1 (IVA 1), Valuation for Financial Reporting and suggests that the valuer reports the result of a DRC valuation as market value subject to the test of adequate profitability or service potential. This suggestion has caused a lot of debate and consternation in the UK where the DRC approach has always been considered as a method of last resort and not a market valuation. However, in continental Europe the cost approach (DRC) is often the principal method of valuation and has always been considered to produce market value. The purpose of this paper is to discuss the impact of this change to valuation practice in the UK.

Methodology/design/approach

In this paper, we discuss the concept of market value and its relationship to DRC in an attempt to identify the principal areas of concern in the UK and, through the use of an Italian case study, show how the DRC approach can be adopted as an appropriate method (not basis) for calculating Market Value.

Findings

It is probable that most valuers will still provide the DRC valuation using exactly the same calculation as they did before. They are likely to provide the same (relative to the valuation date) figure; the difference is that they will feel less easy about the robustness of that figure

Originality/value

It is argued that the UK market has, for too long, hidden behind DRC being a basis of value that UK valuers now feel uncomfortable in reporting DRC as market value. They are uncertain with the valuation figure. However, this uncertainty can be addressed in other ways and a suggested “solution” to help the valuer overcome their discomfort with the market valuation is proffered.

Details

Journal of Property Investment & Finance, vol. 25 no. 5
Type: Research Article
ISSN: 1463-578X

Keywords

Click here to view access options
Article
Publication date: 29 April 2021

Erastus Kiita Museleku

The purpose of this paper is to evaluate the practices for valuation for compensation purposes in Kenya.

Abstract

Purpose

The purpose of this paper is to evaluate the practices for valuation for compensation purposes in Kenya.

Design/methodology/approach

A qualitative survey design was used to sample the registered valuers using questionnaire/telephone interviews, in addition to review of some policy and legal documents. Content analysis and descriptive statistics was used to analyse the data.

Findings

The study revealed that the most ignored asset losses in valuation for compensation purposes in Kenya are assets of persons without legally recognizable rights, common property resources and social capital, among others, due to the existing legal provisions. Additionally, valuers often fail to apply the appropriate valuation concepts and methods.

Research limitations/implications

The findings of the study are specific to Kenya since valuations for compensation purposes are statutory in nature and hence the applicable legal frameworks are unique to a specific country, although professionalism issues cut across.

Practical implications

The study may help professional valuers to update their knowledge and apply the right valuation concepts and methods, and also help policymakers to review their policies appropriately to match the best practices.

Social implications

The findings of the study, if implemented, are likely to enhance acceptability of compensation amounts hence improving the working relationships between the public project implementers and the project affected persons, to the benefit of the both parties.

Originality/value

The study is of value to professional valuers, policymakers and land acquiring agencies to be more vigilant and professional in the process of acquiring interests in land.

Details

Property Management, vol. 39 no. 4
Type: Research Article
ISSN: 0263-7472

Keywords

Open Access
Article
Publication date: 22 March 2021

Yuri Basile Tukoff-Guimarães, Claudia Terezinha Kniess, Renato Penha and Mauro Silva Ruiz

The purpose of this paper is to assess how technology transfer offices (TTOs) of a public university of the state of São Paulo use patent valuation methods in the process…

Abstract

Purpose

The purpose of this paper is to assess how technology transfer offices (TTOs) of a public university of the state of São Paulo use patent valuation methods in the process of using developed technology value and transferring technology to industry.

Design/methodology/approach

This study is an exploratory qualitative investigation based on a case study conducted in a public university in the state of São Paulo. The university has a TTO and an internal structure for technology transfer. In-depth interviews were conducted with the TTO manager about patent valuation and the answers given were analysed.

Findings

The results on how TTOs use patent valuation methods in the process of assigning value to technology indicate which factors facilitate and which factors hinder the valuation of patents in technologies developed at universities.

Research limitations/implications

The possible lack of data disclosure due to confidentiality regarding royalties and trading fees makes further comparisons between Brazilian public universities difficult. Therefore, this study recommends that further studies on patent valuation and technology transfer process at private universities, research institutes and public and private companies should be performed.

Practical implications

In the practice, this study contributes to companies and TTOs by increasing their synergies in licensing negotiations, as well as by reducing the gap of information, between the business parties for assignment and transfer of technologies. With regard to theoretical contribution, this study can cite advances in the methods to measure the financial benefits arising from the valuation of technologies embedded in the patents.

Originality/value

Owing to the lack of research on the methods of valuation used by TTOs of Brazilian universities, the present study can be useful in serving as a theoretical source for future research and in supporting future TTO negotiations in the process of transferring technologies to productive industry.

Details

Innovation & Management Review, vol. 18 no. 1
Type: Research Article
ISSN: 2515-8961

Keywords

Click here to view access options
Article
Publication date: 25 September 2009

Peter Wyatt

Several problems arise from the current valuation standards and guidance in relation to the replacement cost method and they can be classified as definitional and…

Downloads
2227

Abstract

Purpose

Several problems arise from the current valuation standards and guidance in relation to the replacement cost method and they can be classified as definitional and methodological. Definitional problems include confusion over the precise meaning of the terms cost, price and value and clarification of the economic concepts of substitution and “highest and best use” in the cases of market‐based and replacement cost methods. Methodological problems include the difficulty in finding market‐derived inputs, particularly when estimating depreciation, and the need to make end adjustments. These matters raise the question as to whether a replacement cost method is compatible with a market basis of value. This paper aims to address this issue.

Design/methodology/approach

The paper reviews academic literature and professional practice guidance in relation to the replacement cost method of valuation and the market value basis of valuation.

Findings

Defining replacement cost as a method of estimating market value rather than a separate basis of value blurs the distinction between cost and value. This paper argues that market value assumptions do not hold in the case of the replacement cost method.

Originality/value

The paper seeks to stimulate debate on the current professional guidance for the use of the replacement cost method of valuation.

Details

Journal of Property Investment & Finance, vol. 27 no. 6
Type: Research Article
ISSN: 1463-578X

Keywords

Click here to view access options
Article
Publication date: 5 September 2016

David Jansen van Vuuren

The purpose of this paper is to compare the value outcomes of the cost approach to the DCF profits method when valuing specialised property under different scenarios as a…

Downloads
1729

Abstract

Purpose

The purpose of this paper is to compare the value outcomes of the cost approach to the DCF profits method when valuing specialised property under different scenarios as a test for choice of method or model uncertainty; and to quantify valuation uncertainty under each scenario and to argue for an increasing adoption of the profits method of valuation.

Design/methodology/approach

A qualitative case study approach was used to analyse four physical valuations performed in practice under four specific scenarios, namely, a business-as-usual scenario, an underperforming business scenario, an expanding capacity scenario and a combined business-as-usual funding a start-up joint venture scenario.

Findings

The cost approach relative to the DCF profits approach consistently under-values specialised property under business-as-usual and business expanding scenarios while it over-values in instances of underperforming business scenario.

Practical implications

Financial institutions that predominantly uses or accepts the cost approach for valuing specialised property should consider adopting the DCF profits approach as the default approach when valuing for mortgage lending purposes. Business owners of specialised properties should contract practitioners knowledgeable and skilled in the application of the DCF profits method.

Originality/value

This paper quantifies choice of method or model uncertainty of four different scenarios of specialised properties where both the cost approach and DCF profits methods of valuation were employed. It suggests the adoption of the DCF profits method as the default method of valuation for specialised property.

Details

Journal of Property Investment & Finance, vol. 34 no. 6
Type: Research Article
ISSN: 1463-578X

Keywords

Click here to view access options
Article
Publication date: 1 March 1987

MICHAEL STJ HOPPER

The paper describes the various types of retail stores found in shopping centres and states that rental valuations are made by reference to rents paid for comparable…

Abstract

The paper describes the various types of retail stores found in shopping centres and states that rental valuations are made by reference to rents paid for comparable premises. The paper describes the alternative methods of rental valuation which may be employed. The ‘zoning’ method and the ‘overall’ method are described and commented upon with references to relevant case law and examples of each method of valuation. The alternative methods are compared and it is concluded that one or other method may be preferred in particular circumstances. It is concluded that either method may be employed but that the preferred method will be that which best facilitates comparison between rents of stores which differ in location and other relevant characteristics. The paper also deals with capital valuations on an ‘existing use’ basis and concludes that that method of valuation should be by way of capitalisation of actual rents or estimated net rental values.

Details

Journal of Valuation, vol. 5 no. 3
Type: Research Article
ISSN: 0263-7480

Click here to view access options
Article
Publication date: 29 May 2020

Gregory G. Kaufinger and Chris Neuenschwander

The purpose of the study is to evaluate whether the selection of accounting method used to value inventory increases or decreases the probability of a retail firm's…

Abstract

Purpose

The purpose of the study is to evaluate whether the selection of accounting method used to value inventory increases or decreases the probability of a retail firm's ability to remain in existence.

Design/methodology/approach

This study employs a binary logistic regression model to predict group membership and the probability of failure. The study utilizes an unbalanced sample of US publicly traded failed and functioning retail firms over a ten-year period.

Findings

The results clearly support the conclusion that there is a difference in the probability of retail firm failure with respect to the accounting method used to value inventory. Merchants using a cost-based valuation method were 2.3 times more likely to fail than firms using a price-based method. The results also affirm existing bankruptcy literature by finding that profitability, liquidity, leverage, capital investment and cash flow are factors in retail failures.

Practical implications

The results suggest that traditional merchants cannot simply blame e-commerce or shifts in demographics for the retail Apocalypse; good management and proper valuation of stock still matter.

Originality/value

This study is the first to look at firm failure in the retail sector after the great recession of 2008, in an era known as the “retail Apocalypse.” In addition, this study differs from other firm failure literature by incorporating cost- and price-based inventory valuation methods as a variable in firm failure.

Details

American Journal of Business, vol. 35 no. 2
Type: Research Article
ISSN: 1935-5181

Keywords

Click here to view access options
Article
Publication date: 22 December 2020

Laura Gabrielli and Nick French

Valuation is the process of determining Market Value. Property valuation, as with the valuation of all assets, is an estimation of price in the market. It is value in…

Abstract

Purpose

Valuation is the process of determining Market Value. Property valuation, as with the valuation of all assets, is an estimation of price in the market. It is value in exchange. The valuer role is to determine the appropriate approach, the method and use the right model to achieve this aim as best as possible. It is a combination of analysing the market and determining the critical variables for the valuation method/model. The method is separate from the valuation process which should be followed (according to the International Valuation Standards Council Valuation Standards) regardless the valuation method chosen. There are valuation approaches, valuation methods and, as a subset of the methods, techniques or models.

Design/methodology/approach

This practice briefing is an overview of the Valuation Methods and Models available to the valuer and comments on the appropriateness of valuation each in assessing Market Value for specific property types.

Findings

This briefing is a review of the valuation methods and models and models that can be applied to determine market value.

Practical implications

The role of the valuer in practice is to identify the method of valuation and then apply the correct mathematical model for the valuation task in hand.

Originality/value

This provides guidance on how valuations can be presented to the client in accordance with the International Valuation Standards.

Details

Journal of Property Investment & Finance, vol. 39 no. 5
Type: Research Article
ISSN: 1463-578X

Keywords

1 – 10 of over 18000