Explanatory guide of the property evaluation services

Definitions

The real estate assessment is the process that estimates a value type, a type of property to a certain date. The evaluation process is materialized by the evaluation report.

The evaluation is an estimate and not an exact calculation of a value using a mathematical formula or by a precise quantification. The evaluation process requires the application of the professional reasoning of the expert assessor.

Types of evaluations :

Administrative evaluations under the regulations imposed on public authorities. Evaluations on Evaluation Standards.

The purposes of the real estate evaluations:

• A property transaction
• Mergers and exchange properties
• Lending - guarantee loans
• Issue of unsecured debentures
• Issue of new shares
• Resolving disputes - fair compensation in case of expropriation, proven cases of fraudulence of the buyer, to assess damages through property damage, Taxation - property tax, gift tax.
• Insurance - The evaluation is performed according to the insurer (market value, gross or net replacement cost)
• Registering the value of the assets in the financial statements.

Types of value

The market value is the estimated amount for which a property will be changed at the evaluation date, between a decided buyer and a decided seller, in a transaction with an objectively determined price, by a proper marketing, in which the parties involved have acted informed choice, safe and without coercion.

The amount of investment or subjective, defined as:

The value of a property for a particular investor or class of investors, for investment objectives have the operational objectives identified. This subjective concept relates some property of a particular investor, investor group or entity, which have targets and / or identifiable investment criteria.

The fair value represents the amount for which an asset could be voluntarily changed between two parties concerned that are informed choice, in a transaction carried out under objective conditions, with a price determined objectively. In the optics of the International Financial Reporting Standards’ (IFRS / IAS), the fair value is regarded as synonymous with the market value. In the IVS 2 optics, the fair value is a concept broader than the market.

The special value is a sum of money over the market, which reflects the attributes / the characteristics of a specific asset, which have a value only for a particular buyer.

The particular buyer is a buyer who for a particular asset has a special value due to the benefits derived from the ownership, benefits that can not benefit other buyers. The special value may occur when an asset has attributes / characteristics that are more attractive to a buyer or for a limited category of buyers from other buyers.

These attributes / characteristics may relate to the physical, geographical, economic or legal aspects’ of an asset.

The synergistic value is an additional value, which is created by combining / merging two or more properties in which the resulting combination / merger is greater than the sum of the values of the individual’s properties. The synergistic value can be a form of the special value, which appears especially in combination of two or more activities that result in a new asset, which has a value greater than the sum of the values of the individual’s assets.