Best Companies for YOUR Valuation Needs
- Valuation of fixed assets for financial statements;
- Asset appraisal, including residential, commercial, home insurance, real property;
- Business valuation;
- Appraisal of intangible assets;
- Mortgage valuation for International Financial Institutions.
We have worked with diverse clients since 1992, writing appraisal reports in English by native English speakers. We have extensive experience and expertise in all types and purposes of appraisals, providing services and value for European, British, US, Chinese and Ukrainian clients.
Our Companies specialize in valuation of large and complex property appraisals. Personal client references attest to the value, expertise, accuracy and reliability of appraisal reports.
Appraisers with International Certifications in Ukraine
Our American, European and Asian clients value our global expertise and trust in the proven integrity of our American Appraiser Certifications.
For an appraisal report to have value, appraisers must have experience in valuing various types of assets as well as expertise in technologies and assets used in many sectors of the economy, includingreal property, financial services, energy, transportation, oil and gas mining industry, manufacturing of different goods and services, agribusiness etc.
No Ukrainian company has our expertise and experience in preparing valuation reports covering all types of property, plant, equipment and other assets, including valuation of all technologies used by advanced and complicated companies.
Valuation matters: Introduction to International Valuation Standards
“Valuation in compliance with international standards increases profitability and reduces risk“,
Ludmila Simonova, member of TAB IVSC
What methods do we use in the valuation process in Ukraine?
The choice of the basis for the valuation depends on the purpose with which the property valuation, its features, and regulatory requirements are carried out.
According to National Standard No. 1 “General Principles of Appraisal of Property and Property Rights” property valuation is carried out using the principles of utility, demand and supply, replacement, expectation, marginal productivity of the contribution, and the most efficient use.
In determining the market value, the appraisal should be based on the following observations that are typical of the market at the valuation date:
- market prices for selling similar objects or offered for sale;
- influence of market conditions on the functioning of the object, based on the principle of its most effective use in forecasting cash flows or income rates.
The valuation methodology must meet the requirements of Ukrainian State legislation – the Law of Ukraine “On valuation of property, property rights and professional appraisal activity in Ukraine” and the National Valuation Standards, i.e. Standard 1 “General Valuation Principles”, as well as International Valuation Standards IVS-2020.
The following 3 approaches can be used to determine market value:
- approach based on a comparison of sales – a comparative approach;
- Cost (asset) approach;
- An approach based on capitalization of income – Income approach.
The valuation process must evaluate the application of each of these approaches in determining market value or fair value e of the various forms of assets under valuation.
This approach is based on comparing the Market Value of the same objects that have been sold or put up for sale, with objects being valued.
The application of this approach includes the following steps:
- Compile information about a sale or offer for sale;
- Research information about objects that are similar in nature and that can be recognized as analogues;
- Compare the objects being valued with the analogues;
- Estimate differences between objects and analogues and make corresponding adjustments in order to accurately compare the value of the object-analogue to the value of the object of valuation;
- Determine the value of the object of valuation.
The application of this approach is based on analysis of the market and the search for analogues with subsequent adjustment, taking into account differences that affect the cost, the current use of objects and if similar objects were acquired in an open, competitive market.
The comparative approach is the most reliable in valuing objects when it is necessary to sell the objects. This approach is particularly advisable when valuing movable property and real estate.
According to the cost approach, the value of assets is based on all costs of acquiring or constructing a new asset that is consistent with the functional use of the asset being valued. In this method, the residual value of replacement (RVR) is determined on the basis of the cost of the restoration or replacement, taking into account all types of physical, functional and economic depreciation.
The procedures in using the cost approach are as follows:
- Determination of reproduction value (replacement cost) RCN;
- Calculation of various types of depreciation;
- Determination of depreciated replacement cost DRC (taking into account all types of depreciation);
The ability of some assets, particularly land and improvements to generate profits from leasing is one of the objective indicators of their value. The main source of such an assessment is the market terms of the property lease and the forecast of net operating income.
Net operating income is the difference between gross revenue and operating and maintenance costs.
Calculations are made as follows:
- the market size of lease payments for such premises is determined;
- potential gross revenue is projected;
- the maintenance and operation costs are deducted;
- Net Income is calculated;
- appropriate rate of capitalization is applied;
- the value of the object on the date of the assessment is determined.
In the framework of the income approach, the value of an object can also be determined by the direct capitalization of net income (cash flow).
Formula used in the direct capitalization method:
PV – current market value;
CF – the value of the annual projected cash flow;
Ro – capitalization rate.