What is Asset Valuation?
Asset valuation is the process of determining the fair market or present value of assets, using book values, absolute valuation models like discounted cash flow analysis, option pricing models, or comparables.
The most common valuations are tangible asset valuation, such as real estate, marine, energy, heavy industry, plant, machinery & equipment.
Valuers will use multiple types of valuation approaches/methods to ease the process of appraising the market price of these tangible assets accurately.
Type of Asset Valuation
1. Real Estate Valuation
Real estate appraisal, property valuation, or land valuation is the process of developing an opinion of value for real property. For example, houses, land, and other sorts of property.
However, real estate transactions often require appraisals because they occur infrequently, and every property is unique.
For starters, valuers will inspect the real estate’s size together with the latest market value for comparison. Apart from that, they will also take into consideration economic and social trends, as well as environmental conditions that may influence the elements of value, such as:
- Demand: the desire or need for ownership supported by the financial means to satisfy the desire
- Utility: the ability to satisfy future owners’ desires and needs
2. Marine Valuation
Marine valuation involves valuation for all property or transportation that revolves around water or offshore. Thus, valuation could vary from commercial or recreational items, including shipyards, containers, oil tankers, and other water facilities and transportation.
In fact, appraisal analysis of marine and offshore assets is a complex but vitally important task for any organization involved in asset financing, acquisition, and/or operation.
Hence, such appraisals require careful analysis of the asset’s technical details, condition, and a review of the asset’s operating market to react to changing market conditions.
Read more;
When Will I Need a Property Valuation?
3. Energy Valuation
Energy valuation services include oil and gas, metals and mining, and power and utility. Valuation for this sector is crucial, especially for businesses that deal with energy.
The valuation consists of appraising the facilities, together with the functionality of their equipment.
4. Heavy Industry Valuation
The heavy industry refers to an industry that produces large industrial products, which requires large and heavy machinery and facilities and involves complex production processes.
Common examples of the heavy industry include aerospace, shipbuilding, mining, machine tool building, etc.
5. Plant, Machinery & Equipment Valuation
Subsequently, valuers are frequently instructed to value plant, machinery, and equipment used together in an enterprise or by themselves. These include installations and support facilities for processing or manufacturing, designed to perform a specific pre-determined function.
Furthermore, they may also include all nonreality devices in fixed or moveable form, deployed in processing, manufacturing, or assembly of products from the stage of raw materials to finished goods. Separately reported items such as materials, inventories, finished products, patents usually do not form part of plant, machinery, and equipment.
In all valuation procedures, the valuers may use any appropriate method to value the class of assets. They shall disclose the method of valuation used in each valuation.
Valuate your business by PROFESSIONALS!
Head on to Irhamy International Valuers and valuate more than just businesses; valuate your properties – commercial, industrial, plants, machinery & equipment, and intangibles!
If you have any other questions regarding the property or you are keen on purchasing a property, drop us your contacts below, and we’ll be in touch!
