valuation
Liquid valuations are thoroughly scoped, managed and undertaken by chartered professionals to provide you, the client, a consistent and articulated outcome. Since inception in 2003, Liquid has valued in excess of $200bn worth of assets and has grown to provide services across the country.
Valuations are needed to meet a range of requirements. All of Liquid’s valuations are conducted within the regulatory framework of valuation standards, legislation, accounting standards, corporate and government policies. Following is a selection of common valuation services.
Requirement
Lending, purchase, dispute settlement, compensation, selling, transfer, investment, compulsory acquisition, estate planning, council rate objections, tax (capital gains, insolvency, etc).
Valuation
Market Value
Description
The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.
Governing Body
International Valuation Standards Committee
Requirement
Reporting asset values for accounting purposes
Valuation
Fair Value
Description
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Governing Body
Australian Accounting Standards (International Financial Reporting Standards)
Requirement
Insurance, Asset Management, Tax Depreciation
Valuation
Replacement Value
Description
The total cost of replacing an asset, generally in its present form and in accordance with appropriate regulations and legal requirements having consideration to allowances for professional fees and, in the case of tangible assets, factors related to construction of a replacement asset (which may include demolition, debris removal and other factors).
Governing Body
International Valuation Standards Committee, Insurance Industry
Liquid highly recommends entities adopt and maintain regular valuation programs to assist in the provision of information useful to users of financial statements (both management and shareholders) for making and evaluating decisions about the allocation of scarce resources and in discharging the accountability of the reporting entity’s management or governing body.
- Making and evaluating decisions about the allocation of resources by the entity;
- Assessing the financial performance of the entity; and
- Discharging managerial accountability.
Liquid Pacific’s area of expertise is significant and we are able to encompass the majority of real and intangible asset classes such as;
- Land
- Buildings
- Infrastructure
- Network Assets (i.e. roads)
- Library and antiquarian books
- Fine Arts
- Jewellery
- Plant and Equipment
- Databases
- Software
- Mastheads/Logos/Websites
Liquid provides fully scoped valuations to assist both our private and public sector clients establish asset values for the purpose of inclusion in financial statements. Asset valuations are undertaken with reference to Australian Accounting Standards, International Valuation Standards and relevant Government policies and guidelines.
It is recognised valuations conducted within the regulatory framework of local standards may be subject to audit by external independent entities and valuation outcomes are utilised to assist a range of users in;
- Making and evaluating decisions about the allocation of resources by the entity;
- Assessing the financial performance of the entity; and
- Discharging managerial accountability.
Liquid adds-value to all projects by providing advice on;
- Componentisation
- Disclosure requirements
- Accumulated depreciation
- Annual depreciation
- Sensitivity analysis
- Depreciation methodologies
- Effective life categorisation
- Residual life estimates
- Gross values
Componentisation
Australian Accounting Standard 116 (AASB 116) promotes the concept of componentisation. Simply put; depreciation is applied to an asset on a component basis. That is, each part of an item of property, plant and equipment with a value significant in relation to the total value of the parent asset is depreciated separately. The depreciable amount of an asset is allocated on a systematic basis over the useful life of the asset. Liquid Pacific can assist clients discern what items of an asset are singularly significant (i.e. air-conditioning systems), the estimated current cost of the component item, its total useful life at the time of reporting and its remaining service potential.
To discuss your firm’s or Department’s individual asset or portfolio requirements contact Martin Burns, Liquid’s National Director of Valuations to initiate your next valuation project.
Failure to adequately insure assets for reinstatement may, in the event of partial or total destruction; result in the property owner having to share the costs with the insurance company to repair or replace the asset (co-insurance).
To hedge against a potential financial loss, assets should be valued for insurance purposes and to maintain those valuations regularly updates incorporated to provide accurate cover.
Liquid works closely with the insurance industry to ensure we deliver the best outcomes for our clients. When Liquid values your assets for insurance we incorporate within our calculations allowances for;
- Cost escalation over the demolition, planning, reconstruction and commissioning phases
- Demolition costs
- Business continuity costs
- Alternative accommodation costs
- Removal of debris
- Interest on borrowings
- Heritage constraints
- Contamination issues
- Location factors
- Topography
- Cost escalation over the policy period
- Costs to meet current building codes and other regulatory requirements
When Liquid undertakes an insurance valuation of your asset base, we introduce a valuation program to ensure values are maintained over a foreseeable time-frame. Interim adjustments between revaluation cycles will assist in maintaining adequate cover but it is suggested assets be revalued at least every three years to ensure accuracy.
Liquid has the necessary expertise to provide you and your business, council or department with the right advice to establish values for insurance purposes.
Contact Liquid to discuss your insurance valuation requirements.
Liquid’s area of expertise is significant and encompasses the majority of real and intangible asset classes within an organisation. Examples are:
Everyone and every business that owns or has owned property will at some stage need to address taxation matters in relation to the value of their property.
Staggeringly, the Australian Inspector-General of Taxation recently estimated there were at least 206 different tax provisions that may require a taxpayer to determine an unrealised value of an asset or liability, or an alternative value to a realised asset or liability.
As a registered tax agent and chartered valuers Liquid is well versed in providing the necessary valuations to meet clients these needs as well as provide advice which will assist the taxpayer maximise the value of their assets by leveraging tax concessions.
As registered tax agents and chartered valuers Liquid is not only empowered to provide tax advice with regard to property matters but is also qualified to undertake the analysis of assets and liabilities which will assist the taxpayer maximise the value of their assets by leveraging tax concessions
The services we offer include but are not limited to;
- Tax Depreciation Schedules – Enabling our clients to maximise their depreciation allowances for investment properties
- Capital Gains Tax – Current and retrospective valuations in accordance with the ATO CGT reporting requirements.
- Business Transfers and Transaction – Arms length analysis
- Self-Managed Superfunds – Valuations to meet ATO audit guidelines, providing clients with advice on market capital values & market rents
- Land Tax and Rating Valuation Objections – Because many State Valuer-Generals adopt software systems to generate mass appraisals for land tax and council rating purposes, they can get values wrong. Liquid can assist clients with analysing their rate base and if necessary objecting to the underlying values that derive the tax liabilities associated with holding property.
Underlying every business and social interplay is a legal framework which dictates certain legislative requirements are fulfilled and necessarily, independent advice sought.
Valuations are legal instruments. A valuation is a professional and objective opinion as to the value of an asset or liability and which may be relied upon by the legal profession and the courts alike to facilitate business and resolve disputes.
Valuers are not advocates.
Unfortunately, life doesn’t always turn out the way we had anticipated and as a result some individuals and businesses desire to go their separate ways resulting in a need to divide up their collective assets.
Liquid has specialist staff that deal predominantly with family law settlements and estate distributions. The need to have experienced and mature professionals available at these times is imperative to ensure any negotiations or other processes that are in play are not disrupted by a lack of independence from advisors involved.
Business resolutions are normally pragmatic affairs and at Liquid we are able to provide management with the tools to expedite agreements and enable the transfer assets with minimal disruption to day to day activities.
Liquid staff are familiar with the legal requirements of taking instructions, inspecting property and delivery outcomes that are legally dependable.
Valuation for compulsory acquisition is a specialist field tightly regulated by relevant State laws.
In most instances, the compensation you will eventually receive should exceed the market value of your property.
Liquid offers the full gambit of compulsory acquisition services, from analysis through to negotiation of sale or purchase value.
As Liquid has acted for both the acquiring party and the business or person having their property acquired (the acquiree), we are fully cognisant of the legal processes that need to be implemented to progress an acquisition and the relevant compensation (heads of compensation) to be estimated to ensure both parties are fairly treated.
If you or your business has been given notice as to an impending acquisition or a formal notice of acquisition by Government for the whole or part of your property, you need to prepare yourself for what is likely to eventuate. Normally compulsory acquisition has a long lead-in time, that is, you will be notified well in advance of any potential acquisition of your land.
Your notice will normally set-out the purpose of the acquisition, your legal rights in regard to the notice and options available to you at the time of the notice.
It is at this stage you should appoint Liquid as your valuation expert and seek legal representation from firms that specialise in this area (we can assist in this regard).
Note: Any monies you spend on seeking valuation advice, in relation to a notice of acquisition must be reimbursed by the Government as part of their acquisition process (i.e. our services will not cost you anything)
Mass Appraisal (MA), Automated Valuation Model (AVM), and Computer Assisted Mass Appraisal (CAMA) all have their origin in American appraisal theory and practice. In a country of over 300,000,000, American valuation practitioners and statisticians realised early their housing stock was somewhat homogenised and plentiful enough to determine values on a systematic basis.
The concept and adoption of mass valuation has over the past fifty years developed and spread significantly throughout the world due to the introduction of computerisation and promulgated by Governments for use in land tax assessments and rating applications.
Liquid Pacific has created strategic relationships with a number of international organisations that currently provide a range of CAMA solutions. For an analytical overview of your requirements and to discuss further please call Martin Burns +61 (0) 2 9025 3788.