How to undertake a valuation

There is a huge difference between a market valuation (often conducted by your average valuer) and a financial reporting valuation. This is especially so for public sector and not-for-profit sector entities as the majority of assets are usually valued at Current Replacement Cost in accordance with AASB13, IFRS13 or IPSAS45 and IPSAS46.

The types of assets valued range from land and buildings to roads, footpaths, water and wastewater infrastructure, open space and recreation assets, etc. They require expertise, experience and above all a sound compliant methodology that can withstand the audit process.

This technical paper aims to provide an overview of the required steps and the complexities and subtleties that need to be dealt with. While use of an appropriate specialised and experienced financial reporting valuers like APV is highly recommended, with the appropriate methodology and software (Asset Valuer Pro) these valuations can also be delivered internally at a much lower cost.