Asset valuation provides invaluable information on the value
The valuation of your assets provides any society with invaluable information, whether it is done for make choices in operations of purchase, sale or rental of assets, as for the preparation of the financial statements. These must reflect the economic, financial and patrimonial reality of the company so that the shareholders, the management team or other possible interested parties know the position in which the company finds itself; for this purpose it is essential to have an objective valuation of the company’s assets and from this to prepare the financial statements in accordance with the General Accounting Plan, PGC or the International Financial Reporting Standards, IFRS.
In all listed companies or in their stock market listing processes, the valuation of assets is of vital importance to promote market transparency.
Also know the equityproperty development of the company, can give the company a privileged position when making decisions on how to manage a certain real estate portfolio.
For this reason, Euroval, following the recommendations of the Spanish National Securities Market Commission (CNMV) and aware that this type of transactions transcend traditional valuations, has established a series of very strict requirements for the valuation reports it prepares for these purposes, aimed at achieving the necessary rigour, objectivity and independence in their preparation.
Frequently Asked Questions
Why do assets need to be valuated?
Knowing the real and updated value of a company’s fixed assets is essential for its shareholders, financial institutions, insurance companies, auditors, etc. and guarantees that its accounting and financial information is in line with reality. The obligation to comply with accounting standards, either the Spanish General Accounting Plan (PGC) or the International Financial Reporting Standards (IFRS), in order to prepare the financial statements, makes it necessary to have precise knowledge of the value of the company’s assets. Assets may be revalued or calculated for impairment based on the market value determined by an independent expert. In accounting for the value of assets, the fair value criterion (market value), in whose calculation Euroval gives the greatest possible reliability, may replace that of historical cost (acquisition price or production cost). A global market such as the current one requires companies to comply with the International IAS/IFRS Financial Reporting Standards (IFRS). Euroval provides the necessary advice to adapt the value of the assets to these rules. In this line, when companies are listed on the stock exchange, they require advice on the valuation of assets in order to comply with these rules. Being correctly advised when taking certain positions in purchase, sale or rental of assets contributes to obtaining a greater profitability in these operations.
Internal control of asset management involves knowing the value of the assets and their evolution. Making decisions about its management requires the study of alternatives for use and destination, knowledge of market developments and possible changes in market circumstances (regulatory changes, urban planning, manners, etc.). In situations of lack of liquidity, the deferral of debts to the administration requires an objective evaluation of the company’s assets.
What methods does Euroval use to produce an asset report?
All listed companies are governed for the purposes of accounting valuation of their assets (consolidated accounts) by IAS/IFRS and the rest of the companies based in Spain by the 2007 General Accounting Plan (PGC). Euroval has adapted its technical processes to the valuation criteria contemplated in both regulations for the reports it prepares for these purposes. Thus, depending on the type of asset and its consideration for accounting purposes (inventories, investment property, own use), Euroval’s technicians apply the valuation method that complies with the aforementioned regulations to obtain fair value, net realisable value and value in use.
For other purposes, the valuation systems established are based on reasoned criteria that are internationally recognised by current legislation and adapted at all times to the purpose of the report.
Who should make an assessment?
The valuation reports are prepared by teams of experts in the field, in order to make a homogeneous and justified application of the valuation rules adapted to the purpose of the report and the type of asset to be valued. Euroval has teams of professionals with extensive experience and knowledge (architects, engineers, economists, lawyers, etc.) who are supervised by its control and validation team, which ensures the final quality of the report.
How soon would you have the report?
Once the client has provided the necessary documentation and, if applicable, the visit to the property, Euroval will deliver the report within a minimum period of five working days, except in cases of large portfolios or complex goods, for which it will provide a delivery period in advance in accordance with the nature of the request.
Euroval is always governed by the principles of rigour, independence and objectivity. Rigor is ensured by the strict valuation rules to which we are subject, which establish the methodology and valuation criteria most appropriate to the purpose of the report. Independence is safeguarded by the composition of the company’s shareholders, administrative body and experts, who are not linked to any person, company or entity that may generate a conflict of interest with the assets to be evaluated or expert witnessed. We are solely and exclusively dedicated to valuation, both in Spain and in other countries, acting in accordance with the regulations established in this respect and monitored by the system of supervision to which the company is subject, which guarantees its objectivity. For all the above reasons, we offer you the preparation of this type of report with a methodology in accordance with the nature of the asset and the purpose of the report, and, where appropriate, in accordance with the requirements of the regulations in force. Euroval is a company approved by the Bank of Spain and by the CNMV (Spanish National Securities Market Commission). Our reports appraisal have a total guarantee of objectivity.