Valuation Reasons
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ENRC is used to insure assets that form part of a profit making concern, so that in the case of a loss the asset is replaced in the shortest possible time in order to minimise profit loss.

This value also allows for budget planning when assets are due for replacement and a sinking fund can be established.

DRV reflects the value of profit making assets to the company allowing for their age and condition.

MARKET VALUES fall  into several categories and can be used for various reasons:-

  • Open Market Value allows for assets open for sale against similar assets from other sellers.
  • Market Value in Continuation of Existing Use is usually applied when a company is selling the full business as a going concern and takes into account that each asset is, or should be, part of a profit making concern and so would have a higher value attached to it.
  • Forced Sale Market Value reflects the value that may be realised should an asset be offered for sale under conditions of duress.

Market values are used for varying reasons, a partner selling his shares to the remaining partners MVCEU ; security against a bank loan OMV ; Auction of assets after a company has been liquidated by creditors who now want settlement FSMV.

When carrying out a valuation the valuer must not only take into account the cost of an asset but must also have an intimate knowledge of exchange rates, import duties and surcharges, freight costs and installation, all of which make up the true cost of an asset.

When market values are researched the valuer needs to be well aware of the current local, national and international markets in order to be certain the values are correct.