The main stages of the assessment. Main stages and procedures of assessment Application of the time-consuming approach to assessment

In the process of assessing the value of a business, three main stages (and seven smaller ones) can be distinguished:

Preparatory stage.
Evaluation stage.
The final stage.

Preparatory stage

1. Selecting a cost standard and valuation methods

The first stage of business valuation is to determine the required value in accordance with existing business value standards. (See "Introduction to Business Valuation"). Then, when the necessary standard of business value is determined, the methods necessary for valuing the company are determined, which are most suitable in this particular case.

2. Preparing information for the assessment

In accordance with certain assessment methods, the set and volume of required information is determined. Information can be drawn from several sources, such as: the company being valued, the stock market, various statistical information, marketing research etc. According to the BVS-III standard, this information should cover:

Characteristics of the enterprise, shares of shareholders in the capital of the enterprise or valuable papers subject to evaluation, including rights, privileges and conditions, quantities, factors affecting control and agreements limiting sale or transfer.
General characteristics of the enterprise, its history and development prospects.
Financial information about the company for previous years.
Assets and liabilities of the enterprise.
General characteristics of the industries that influence this enterprise; their current state.
Economic factors influencing this enterprise.
The state of the capital market as a source of necessary information, for example, on possible rates of return on alternative capital investments, on transactions with publicly traded shares, on mergers and acquisitions of companies.
Data on previous transactions involving the company being valued, shareholders' shares in the capital of the company or its shares.
Other information that the appraiser considers relevant to the assessment.

As can be seen from this, when assessing a business, it is necessary to use retrospective accounting information (accounting statements) and the current financial and economic indicators of the company. The timing of recording the data used and the moment of evaluation are not consistent with each other. Discrepancies in data over time create conditions for various types of distortions to appear in them. Among them are: changes in accounting standards for source data, denomination of monetary units, exchange rate fluctuations, structural changes in prices, etc. These inconsistencies give rise to the problem of adjusting all financial and accounting reports used in order to bring them to a common time standard, which is the moment assessments.

Reduction and adjustment financial statements governed by the BVS-IX standard, this process may include:

Bringing financial information about the company being valued and similar companies to a single basis.
Conversion of reporting values into current ones.
Adjusting income and expense items so that they sufficiently fully characterize the company's performance over a long period of time.
Accounting for non-performing assets and liabilities, and related income and expenses.

Bringing financial reporting to a unified basis.

Within state system accounting The company always has the freedom to choose accounting methods. This choice is fixed in the order “On the accounting policy of the enterprise” for a period of one year and may change over a number of years. The principle of preparing financial statements does not require reflection of the real market value of certain assets of the enterprise. In such a situation, companies prefer to use accounting methods that will minimize taxes.

Business valuation requires obtaining standardized data that reflects the real market and economic position of the company. As a result, the company’s financial statements used must be brought to unified standard accounting.

Because the Russian legislation does not provide standards for the preparation of this kind of financial documents, and Russian investors have not developed a single generally accepted standard for bringing an enterprise’s reporting to reflect its market condition, then a possible option is to bring the reporting to IAS / GAAP / FRS standards.

Adjustment of information used for inflation.

The assessment of an enterprise should be based on real (cleared of the influence of inflation) values of the indicators used. In conditions of significant price changes, the accounting values of cost indicators differ significantly from their real values. Thus, the use of accounting data requires their adjustment taking into account price dynamics, i.e. inflation (or deflation) and structural changes in prices. However, in modern conditions The main influence of the Russian economy is the distorting influence of inflation.

In theory financial management There are two alternative ways to adjust (clean) indicators for the impact of inflation:

direct adjustment of assets and monetary amounts to the values of inflation indicators;
taking into account the impact of inflation on assets and monetary amounts by including inflation indicators in the discounting procedure.

Differences in the value of the final indicators when using these approaches are negligibly small in industrial developed countries with an established market and a normal inflation rate. In countries with high rates of inflation or hyperinflation, differences in the values of the final indicators appear depending on the choice of one or another inflation adjustment approach. When conducting assessments in the Russian Federation, it is preferable to use methods based on direct adjustment of monetary amounts to the values of inflation indicators.

Moreover, as shown in the work of St. Petersburg State Institute of Economics and Economics professor P. A. Vatnik, inflation has a different impact on flow type values (revenue, profit, input of funds, etc.) and on stock type values (assets of all types). In addition, the distortion of various indicators is associated with the differences in the conditions for their formation in the accounting system. In accordance with the results of the study, adjustments to accounting and design data various types necessary for financial and economic calculations and forecasts should be carried out separately.

The values of inflation indicators, depending on the area of operation of the company, can be: the price index of producer enterprises, the consumer price index, the devaluation values of the main currency, or the price index can be calculated for a specific company.

3. Evaluation financial situation companies

In the process of assessing a business, there is a need to preliminary check its financial position. Such a check allows you to obtain important background information about the company being valued and calculate the values of the adjustment indicators necessary to find the final value of the business.

To assess the financial position of a company, it is necessary to choose a model that allows:

take into account the chosen model for adjusting indicators for the impact of inflation;
reflect the financial position of the company at the time of assessment;
match financial condition the company's economic security requirements;
determine the surplus (deficit) of the company’s working capital.

The methodology for assessing the financial position of a company for business valuation purposes can be based on one of three main approaches.

The first approach involves organizing differentiated accounting of all debt obligations according to their maturity dates. At the same time, the intensity of future cash receipts is established and their sufficiency is checked at certain points in time. This approach is based on the use of primary information on financial flows. Systematization of this information is very labor-intensive and is only really feasible in companies that manage financial flows.
The second approach is based on the use of a special liquidity balance, which allows one to establish the financial position of the company. When compiling a liquidity balance, all balance sheet items are regrouped depending on the speed of their turnover. By comparing parts of assets sold by a certain date with parts of liabilities that must be paid (repaid) by the same date, the value of the payment surplus or payment deficit at a certain moment is established.
The third approach is based on the use of indicators calculated based on a comparison of the volume of individual funds and sources existing at a specific point in time. These may be liquidity indicators, indicators of financial dependence or autonomy, indicators financial stability etc.. The practical use of any version of the indicators is associated with the establishment of a critical level that makes it possible to classify the financial position of the enterprise from the point of view of solvency. Since indicators serve only as indicators and do not allow one to directly determine the degree of solvency, this method is not guaranteed against errors. However, in most cases, it allows one to obtain a correct diagnosis of the true financial position of the enterprise, which has sufficient accuracy for its inclusion in the subsequent procedure for assessing the enterprise. Also, the advantages of this method include high degree formalization.

4. Company risk assessment

For the purposes of business assessment, risk should be defined as the degree of uncertainty associated with obtaining expected future income, in other words, it is the danger of failure to achieve (deviation) the planned volume of expected future income or the risk of non-realization of the forecast.

Given a given level of expected future earnings, the market will pay more for a business if those earnings are more likely to occur. In other words, for a certain level of expected future profit (or cash flow, dividends, etc.), the lower the risk, the higher the current value of the business.

There are two approaches to interpreting risk elements when conducting an assessment:

making downward adjustments to expected future flows (profits, cash flow, dividends, etc.) to reflect this uncertainty;
accounting for risk by using a higher discount rate in estimating the expected flow so as to reflect the required return as a reward for the risk.

American scientists Birman and Schmidt have convincingly shown that a theoretically more correct option for taking into account the element of risk is to reduce expected future income to what they called a “certainty-adjusted equivalent.” They recommend adjusting the expected flow using a coefficient that reflects the probability of receiving a given flow. It is then possible to apply the same discount (a measure of the cost of capital) to evaluate all alternative investment decisions.

However, in practice, the approach to accounting for risk by using a higher discount rate is the most commonly used. Economic sense The increase in discount rate used is to seek some additional return above the risk-free rate as compensation for the risk of holding these assets. This approach is represented by the two most common models, the CAPM/ART and the cumulative method.

Evaluation stage.

5. The necessary calculation procedures provided for by the selected business valuation methods are carried out

The final stage.

6. Cost adjustment

In any case, whether an attempt is made to forecast the future or based on historical data, business valuation is based on a number of key variables. Their relative importance may vary depending on the specific situation, but in many cases internal variables such as:

size of the assessed share (majority or minority);
having voting rights;
liquidity of the company (package);
provisions restricting property rights;
special privileges;
financial position of the assessed object;
and etc.

Moreover, it should be taken into account that the sum of the values of all individual blocks of shares may differ from the value of the enterprise taken as a whole. In most cases, the sum of the values of the individual packages is less than the value of the entire business as if it had been purchased by a single buyer. A company valued as a whole has a different value because the latter involves different rights and interests than the sum of all interests taken on a minority basis.

Adjustment of company value to financial position

The key internal variable is the financial position of the subject being assessed. This is the most important qualitative indicator of the state of the enterprise (business), since it is obvious that an unprofitable business that is on the verge of bankruptcy cannot have a similar valuation with profitable and solvent.

For the purpose of accounting for the financial condition when assessing an enterprise, the following is used: quantitative indicator, as a surplus (deficit) of working capital. The amount of working capital surplus (deficit) is calculated by comparing the required working capital and the available working capital.

If the analysis of the financial position of the enterprise reveals the presence of excess working capital, then it must be added to the resulting price of the enterprise, since this value expresses the available unclaimed highly liquid assets.

If a working capital deficit is identified, it must be subtracted from the resulting price of the enterprise, since this value represents the funds that the owner (investor) of the enterprise must invest in the enterprise in order to ensure its uninterrupted functioning in the future.

Adjustment of the company's value by the assessed share. Degree of control.

One of the most important variables affecting the value of a business is the degree of control.

The value of control depends on the ability to exercise any or all of the rights typically associated with control of an enterprise. When assessing the impact of control, the presence or absence of various elements of control in a given case should be determined and the impact of each element on the cost of control should be taken into account. The following is a list of some of the most common control prerogatives:

elect directors and appoint management;
determine management remuneration and benefits;
adopt policies and make changes in the direction of the enterprise;
acquire or liquidate assets;
select the people with whom business should be conducted and contracts will be concluded;
make decisions on the acquisition of other enterprises;
liquidate, dissolve, sell off or recapitalize the company;
sell or purchase your own shares in the company;
register company shares for public issue;
declare and pay dividends;
make changes to statutory documents or internal regulations.

Based on the above list, it is clear that a person who owns a controlling stake in an enterprise has some very valuable rights that a shareholder who is not in a similar position does not have. Each specific case must be considered separately, taking into account the degree of control or its complete absence. In the event that any of the elements of control are missing, the estimated value of the controlling interest must be reduced. If there is any significant element of control in the minority stake, then it should also be taken into account when assessing it.

There are three approaches to accounting for the value of a non-controlling interest in a business:

A proportionate share of the cost of the entire enterprise minus any applicable discounts.
Direct comparison with sales of other non-controlling interests.
Bottom-up approach. Starting from zero, all available elements of the value of the non-controlling interest are sequentially summed up.

Adjustment of the company's value by the assessed share. Liquidity adjustment.

Suitability for quick sale (liquidity) definitely increases the value of a business and, on the contrary, the lack of liquidity reduces its value compared to a comparable, however, highly liquid business. In other words, the market pays a premium for liquidity and reduces the price when there is no liquidity.

Since shares of closed companies are not traded on a highly liquid market public companies, then a share in a closed company is usually worth less than packages of open companies that are comparable in other respects. The relative liquidity of different holdings is influenced by many factors. The size of the share can also be important. In some cases it is easier to sell a smaller share, in others it is the opposite. Over time, the importance of the liquidity factor in business valuation has become increasingly recognized. Numerous recommendations and facts indicate that unfitness for sale reduces the value of shares (or shares) of private companies compared to shares of public companies by an average of 35-50%.

The lack of liquidity of a package can be taken into account in one of three ways:

increasing the discount rate so that it takes into account the disadvantages associated with illiquidity;
a discount for illiquidity can be made separately;
The liquidity discount can be factored into the risk adjustment process.

Key management personnel.

Perhaps the strongest quality characteristic of many closely held companies is their dependence on one or more key management personnel. In some cases, this factor may be so important that a separate special adjustment must be made for it when estimating the cost.

Low diversification of production.

Many closely held companies have a very narrow range of products, which may increase their risks and/or limit their capabilities relative to other companies. The narrowness of the product range can become a limiter for both categories potential consumers, and the number of potential consumers in each category. It can also increase the risks associated with a shortage of some basic types of raw materials or with the launch of new competitive products.

Other factors.

Other factors that should be taken into account in various cases include the intensity and nature of a company's R&D efforts, its position in the industry, the size and quality of its assets relative to other companies, and its education and training programs.

7. Drawing up a business valuation report

The preparation of a business valuation report is governed by the BVS-VIII standard.

The identified objectives of the assessment report are to:

present the analysis and conclusion in a clear and convincing manner;
document assessment details for reference.

In most cases, the assessment report contains the following sections:

Introduction. (General information)
Macroeconomic information.
Industry information.
Description of the company.
Description of information sources.
Analysis of the financial and economic situation of the company.
Approaches to assessment and conclusion.

This is an orderly process based on the principles discussed in the previous paragraphs. It is based on the scientific method and is applicable to a wide range of assessment tasks. Market and other information is used to predict situations and adjust facts and assumptions.

The entire process of assessing a property consists of six stages, namely:

1) definition of the task,

2) drawing up an assessment plan,

3) collection and verification of information,

4) application of the most appropriate approaches to assessing the object and analysis of options for the best use,

5) coordination,

6) a report on the result of assessing the value of the object.

Let's look at each of these stages.

Stage 1. Definition of the problem.

The conditions of the task are certainly dictated by the client. He determines for what purpose the assessment is made. But the appraiser must very carefully and scrupulously clarify all the interests and intentions of the client, since the result will depend on the correct task. Wherein It is imperative and important to identify the real object and determine the legal rights associated with it.

- identification of the property,

- establishment and clarification of legal rights,

- date of assessment,

- description of the purposes of the assessment,

- determination of the type of cost,

 determination of additional conditions.

Stage 2. Drawing up a plan for assessing the property.

After defining and understanding the problem, it is necessary to look for ways to solve it.

This is best done through structuring the assessment process, i.e. drawing up a general scheme, providing for consideration first of all common factors, and then more specific ones. For example, from the regional level of cost of identical objects it is necessary to move (descend) to the cost at the level of the local market or its segment. At the lower level, an analysis of specific factors affecting the cost of a given land plot and the buildings and structures located on it.

The sequence of procedures at this stage includes:

1) determination of information requirements;

2) identifying sources of its receipt;

3) identification of the most appropriate methodology;

4) determination of time and labor costs;

5) drawing up a work plan;

6) specification of proposals on the terms of the task and the fee;

7) signing the contract.

It should be noted that the last points serve to clarify and increase the responsibility of both the appraiser and the client.

Stage 3. Collection and analysis of information.

It is obvious that a real assessment of the value of a property can be obtained if complete and reliable information is available, including both general and special data.

TO general data includes information of an economic, social, legal, environmental nature. The sources of such information are statistical reports, financial and economic publications and real estate valuation magazines. For a reliable assessment, it is also necessary to know the level of inflation, bank loan and reinvestment rates, purchasing power, price levels, employment, etc.

General information also includes information about the area where the property is being assessed.

Special data must contain information about the ownership of the object, general characteristics land plot and factors that improve the quality of the object.

The physical characteristics of the land plot must be complete and reflect its most important parameters:

 area and shape (i.e. size, boundaries along the street, river, highway);

 topographical and landscape-compositional features (relief, landscape, presence of reservoirs, vegetation);

 description of the nearest territory adjacent to the site (presence of roads, access roads, stops public transport, buildings), social infrastructure;

 possible improvements on the site (development of elements of existing infrastructure).

It is also necessary to have information about the sales and profitability of similar objects, the costs of their creation, which will be required when valuing real estate using one method or another.

Stage 4. Analysis of the best and most effective options use of real estate involves looking for opportunities to increase income from both land and buildings.

Stage 5. Agreement.

During this process (called the “examination of conscience”), the appraiser re-examines the accuracy of the information, the applicability of certain valuation principles, re-examines the value indicators and determines the final result.

Coordination provides for the following procedures:

 review of cost factors in their connection with valuation principles;

 re-checking statistical and probabilistic indicators;

- logical reasoning and judgment based on common sense based on the indicators of the considered options;

 final conclusion on the value of the assessed object after summing up the assessment indicators in the final table.

Carried out taking into account limiting conditions.

The methodology of the assessment procedure is, within which various assessment methods are used.

The cost assessment procedure, regardless of the specifics of the object being valued, consists of standardized stages:

formulation of the problem;
developing an assessment plan;
collection and verification of information;
selection and use of assessment approaches that correspond to the task assigned to the appraiser;
agreement on assessment results;
drawing up a report on the result of the cost assessment.

When setting a problem Special attention pay attention to the definition of the object of assessment (its size and characteristics), the legal rights associated with it, which may represent an equity participation in the assessed object. Here it is necessary to identify all the limiting conditions and time frames within which the cost estimate remains reliable.

Developing an evaluation plan includes determining information requirements, identifying appropriate methodology, estimating the evaluator's time and effort, and submitting proposals for engagement terms and fees.

Positive results are obtained by structuring the assessment when it begins with consideration of general factors of economic and social development at the macro level and regional level, affecting the cost. At the same time, the corresponding market or market segment, the existing relationship between supply and demand and the prospects for their changes in the short term are determined. Then, specific development factors at the micro level directly related to the object are analyzed.

To avoid unproductive costs and loss of time, determine the volume and structure of the information necessary for the assessment. Considering the possibility of using three traditional approaches to assessing costs, identifying their positive and negative sides. The most accurate estimate of the value of an object is obtained by comparing the estimated value, when different approaches are used. At this stage, a work schedule is drawn up to conduct an assessment and determine the amount of costs (money and time) associated with collecting and verifying information, and paying for consultants invited from outside. If the assessment requires the provision of a written report, the costs of drawing up charts and graphs are taken into account.

The appraisal proposal is submitted in writing; it serves to clarify the responsibilities of the client and the appraiser and helps to avoid misunderstandings in the future. The professional appraiser's fee proposal must also be submitted in writing; it takes into account the complexity of the task, overhead costs, legal risk associated with the work and the range of services provided.

Collection and verification of information includes checking the materiality and reliability of the collected information, identifying possible distortions and deviations of information on comparable transactions (unreliable or insignificant information will complicate or make it impossible to prepare a reasonable conclusion about the value).

The selection and use of approaches to assessment (comparative, income, cost), corresponding to the task assigned to the appraiser, is carried out depending on the characteristics of the object of assessment, the purposes of its implementation, the features of each approach, taking into account the specifics of assessment methods and techniques. (For example, the discounted cash flow method is applicable when valuing an investment, since the investor invests capital in an operating enterprise, taking into account the present value of future cash earnings. The cost approach is appropriate if the object being valued has significant tangible assets, or there is no historical data on profits, or there is no possibility reliably estimate future profits or cash flows).

Reconciliation of valuation results occurs through a process of logical reasoning and decision-making, including a review of factors in relation to the principles of valuation, consideration of statistical and probabilistic indicators, and a final proposal for an estimated value. During this process, the appraiser re-examines the validity of various measures of value and considers the possible range within which the property's assessed value lies. When preparing a report on the result of a valuation, the appraiser sets out his findings and conclusions and transmits the valuation report to the client.

The process of establishing the value of real estate is carried out according to certain principles, using established methods. Real estate valuation includes several stages.

Stage 1. Statement of the problem - why it is necessary to determine the cost of the object. At this stage, it is necessary to clarify the purpose of the procedure. For example, to sell an apartment or to obtain a mortgage loan.

It is necessary to find out exactly what price is to be set. This will depend on the purpose of the assessment work. So, to sell property, you need to determine the market value, and to issue an insurance policy, you need to determine the insurance value. Collateral value usually calculated when you take out a mortgage on the property to provide credit.

The date for the work must be determined. Everything is recorded possible conditions and circumstances that may affect the final cost.

Stage 2. Formation of a plan and agreement. The appraiser, after preliminary familiarization with the object, draws up a procedure for conducting appraisal work, which begins with visual inspection real estate, familiarization with the information provided. If the object is large enough, then the need to attract additional expert appraisers is determined.

At the end of this stage, it is required to draw up and sign an agreement, which indicates the parties entering into it.

Also It describes the subject of the contract, the timing of the work, and the cost of the services provided.

Stage 3. Collection of information and substantiation of conclusions. This stage is the most critical. The final result depends on what information is collected.

The property is studied in more detail and described in detail. Possible defects are indicated and the surrounding area of the object is described. Available legal papers are analyzed and their accuracy is checked. The object is considered from the point of view of its economic and social location.

Finally, all collected and provided information is analyzed by a specialist.

Stage 4. The most suitable one is selected and effective method the use of this territory, both as a developed place and as a supposedly vacant one. The highest price for the use of the land plot where the facility is located is determined.

Stage 5. The procedure for calculating the cost of an object. It is carried out on the basis of three main calculation methods:

the income approach is based on determining the possible receipt of economic benefits from the use of a given object.
The comparative method is based on comparison of similar properties. This method cannot be applied to unique objects, since the real estate must be comparable.
The cost approach is based on the inclusion of those expenses that were previously incurred and which should be additionally made to restore the object, taking into account its wear and tear.

Stage 6. Coordination of the results obtained taking into account all conditions. At this stage, possible inaccuracies and errors are identified. The final total cost is formed.

Stage 7. Drawing up an evaluation report, which is transferred to the customer of the work.

It must contain the following information:

date of the report;
information about the appraiser;
basis for carrying out appraisal work;
description of the property;
a list of methods and methods of assessment used;
tolerances and restrictions when determining cost;
list of documentation;
the total cost of the object.

Object cost criteria

The final price of real estate is influenced by a huge number of criteria and factors:

For real estate, the value is significantly influenced by the year the building was built, as well as the material from which it was built.

How assessment is carried out in practice: procedure

Usually, when a real estate appraisal takes place, the two parties to the transaction have different views on the final result. The bank is interested in understating the value of real estate. If it is lower, then the sale of the object as collateral may be faster.

For the borrower, a higher cost guarantees a larger loan amount. This situation should be taken into account when a banking organization provides its appraiser.

Moreover, when appraisal work is carried out by an independent specialist, the bank may refuse to accept such a report.

Real estate valuation is a procedure that is required to establish the value of an object at a specific moment. Specialist appraisers perform work to determine the value. The assessment procedure consists of several stages, each of which is important for establishing the exact final cost.

1st stage – definition of the assessment task (problem definition)

· purpose of assessment

· type of value determined

· establishing the boundaries of the property being assessed (i.e. what exactly should be assessed and analyzed)

· establishment of appraised property rights

date of assessment

Stage 2 - drawing up a plan and agreement for the assessment

· assessment work schedule

· information sources

· choice of assessment methods

· assessment costs

· monetary reward for conducting the assessment

· drawing up an assessment agreement

Stage 1 - collection and analysis of information

· inspection of the facility and surrounding area

· legal description property

physical characteristics and location

economic information

· checking the accuracy of the collected information

· analysis and processing of information, and preparation of this information for recording in a report

Stage 1 - analysis of the best and most effective use

· analysis of the land plot as conditionally free

· analysis of land with improvements

· legal validity

· physical feasibility

· financial feasibility

· highest real estate value

Stage 1 - calculating the estimated value of the property based on three approaches

· profitable

· comparative

· expensive

Stage 1 - coordination of the results obtained and derivation of the final value of the property

· checking the received data on the value of the cost

· assumptions and limiting conditions due to the completeness and reliability of the information used

· derivation of the total value of the cost

Stage 1 - preparation of an assessment report

APPLYING THE INCOME APPROACH TO VALUATION

Income approach. Valuation of property by its profitability is a procedure for assessing value based on the expectations of the buyer-investor, focused on future benefits from its use and their current value in a certain amount of money. Another provision of profitability valuation is the principle of substitution, according to which a potential investor will not pay more for real estate than it would cost to purchase other real estate that can generate similar income.

The calculation of value can be carried out using the method of direct capitalization of income or discounted cash flow analysis. The essence of the income capitalization method is that the value of a real estate property is determined by converting the annual net operating income (NOI) into the current value. This method is used if the income streams are stable over a long period and are significant, and also if the income stream is growing at a steady pace. The discounted cash flow (DCF) method is more complex, detailed and allows you to evaluate an object in case of receiving unstable cash flows from it, modeling character traits their receipts.

The DCF method is used when:

§ it is assumed that future cash flows will differ significantly from current ones;

§ there is data to justify the size of future flows Money from real estate;

§ income and expense flows are seasonal;

§ the property being assessed is a large multifunctional commercial facility;

§ the property is under construction or has just been built and commissioned: (or put into operation).

APPLYING A COMPARATIVE APPROACH TO ASSESSMENT

Comparative approach is based on the premise that market entities carry out purchase and sale transactions by analogy, i.e. based on information about similar transactions. It follows that this approach is based on the principle of substitution. In other words, the approach is based on the assumption that a prudent buyer will pay no more for a property put up for sale than what a property of similar quality and suitability could be purchased for.

This approach involves collecting data on the sales market and offers for real estate properties similar to the one being evaluated. Prices for similar properties are then adjusted taking into account the parameters by which the properties differ from each other.

Once prices are adjusted, they are used to determine the market value of the property being appraised. If there is sufficient reliable information about recent sales of comparable properties, the sales comparison approach allows us to obtain a result that most closely reflects the market's attitude towards the subject of valuation.

The comparative approach uses the following assessment methods:

Sales comparison method;

Method based on the application of the gross rent multiplier;

APPLYING A CASE STUDY APPROACH TO EVALUATION

The basic principle on which the cost approach to valuation is based is the principle of substitution, which states that an informed buyer would never pay more for any property than the amount of money it would cost to acquire the land and construct buildings and buildings on it. structures similar in their consumer characteristics to the property being valued.

The main steps in applying this approach to determining cost are:

Determination of the market value of the right to use a land plot.

Calculation of costs for the construction of a new similar object and obtaining the full replacement cost of the object.

Determination of the amount of accumulated depreciation of fixed assets.

Reducing the replacement cost by the amount of depreciation to obtain the residual value (replacement cost).

Increasing the calculated residual value of the complex by the cost of the land plot.

FSO REQUIREMENTS FOR THE CONTENT AND PREPARATION OF AN ASSESSMENT REPORT

When preparing a valuation report, the appraiser must adhere to the following principles:

· the report must contain all information that is significant from the point of view of the value of the valuation object (principle of materiality);

· information provided in the assessment report, used or obtained as a result of calculations during the assessment, significant from the point of view of the value of the subject of assessment, must be confirmed (the principle of validity);

· the composition and sequence of materials presented in the assessment report and the description of the assessment process should allow the cost calculation to be completely reproduced and lead to similar results (the principle of verifiability);

· the assessment report should not contain information that is not used during the assessment to determine intermediate and final results, unless it is mandatory in accordance with the requirements of federal assessment standards and the standards and rules of assessment activities established by a self-regulatory organization, of which the appraiser who prepared the report is a member ( principle of sufficiency).

Requirements for the content of the assessment report

Regardless of the type of assessment object, the assessment report must contain the following sections:

a) basic facts and conclusions. The main facts and conclusions section should contain:

· general information, identifying the object of assessment;

· assessment results obtained by applying various approaches to assessment;

· the total value of the valuation object;

b) assignment for assessment in accordance with the requirements of federal assessment standards;

c) information about the customer of the assessment and the appraiser. The assessment report must contain the following information about the assessment customer and the appraiser.

Customer information:

about the customer - legal entity: organizational and legal form; full name; main state registration number(hereinafter - OGRN), date of assignment of OGRN; location;

about the customer - individual: Full Name; series and number of the identity document, date of issue and authority that issued the document.

Appraiser information:

· about the appraiser working on the basis employment contract: last name, first name, patronymic of the appraiser, information about membership in self-regulatory organization appraisers, number and date of issue of the document confirming receipt professional knowledge in the field of appraisal activities

· about the appraiser who carries out appraisal activities independently, engaged in private practice: last name, first name, patronymic; series and number of the identity document, date of issue and authority that issued the specified document;

· information about all organizations and specialists involved in the assessment and preparation of the assessment report, indicating their qualifications and the degree of their participation in the assessment of the subject of assessment;

d) assumptions and restrictive conditions used by the appraiser when conducting the assessment;

e) applied standards of valuation activities.

The assessment report must provide information about federal standards assessment, standards and rules of assessment activities used when assessing the subject of assessment;

f) description of the subject of assessment with references to documents establishing the quantitative and qualitative characteristics of the subject of assessment.

The assessment report must contain the following information about the subject of assessment:

quantitative and qualitative characteristics of the object of assessment.