REAL PROPERTY | PLANT & EQUIPMENT | BUSINESS VALUATION

 

Real Property Valuation

A Real Property Valuation is a study that generates an opinion of value of different real property interests (i.e. Fee Simple, Freehold, Lease Interest, etc).

Real property valuation is used for:

  • Financial reporting
  • Tax Compliance
  • Buy or Sell Decisions
  • Collateral Evaluation
  • Insurance
  • Estate Partitioning
  • Court Litigation
  • Lease Pricing

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In all valuation assignments, Aviso complies with the International Valuation Standards (IVS) and its Code of Professional Ethics – ensuring that valuation assignments are conducted with integrity, reliability, competence, and excellence. We adopt the three approaches to value: Market Approach, Cost Approach, and Income Approach depending on appropriateness and applicability. We also employ growth-explicit methodologies such as Discounted Cash Flow Analysis and Hypothetical Development Method.

Valuation for Financial Reporting purposes may be conducted on an annual basis depending on a company’s revaluation policy. Aviso integrates the International Financial Reporting Standards in valuation, such as the standards on Property, Plant and Equipment (IAS 16), Investment Property (IAS 40), and Fair Value Measurement (IFRS 13).

Valuation for Tax Compliance is conducted for every taxable transfer of real property, whether the property is a Capital Asset or an Ordinary Asset as defined by the National Internal Revenue Code.

Valuation for Buy or Sell Decisions is conducted for potential asset disposal and acquisition. Investors may be interested in a property’s Investment Value which is computed based on a property’s income-generating potential. While Developers may be interested in a raw land’s Special Value which is computed through the Hypothetical Development Method.

Valuation for Collateral Evaluation is conducted for possible mortgage of real property with financial institutions such as banks that require the opinion of an objective third-party valuation company.

Real property valuation is used for:

Financial Reporting

Valuation for Financial Reporting purposes may be conducted on an annual basis depending on a company’s revaluation requirement. We integrate the International Financial Reporting Standards (IFRS) in valuation, such as the standards on Property, Plant and Equipment (IAS 16), Investment Property (IAS 40), and Fair Value Measurement (IFRS 13).

 Tax Compliance

Valuation for Tax Compliance is conducted for every taxable transfer of real property, whether the property is a Capital Asset or an Ordinary Asset as defined by the National Internal Revenue Code or Shares of Stocks held as Capital Assets.

Possible Sale or Acquisition of Property (Strategic Decision)

Valuation for Buy or Sell Decisions is conducted for potential asset disposal and acquisition. Investors may be interested in a property’s Investment Value which is computed based on a property’s income-generating potential. While Developers may be interested in a raw land’s Special Value which is computed through the Hypothetical Development Method.

Collateral Evaluation

Valuation for Collateral Evaluation is conducted for possible mortgage of real property with financial institutions such as banks that require the opinion of an objective third-party valuation company.

Plant & Equipment Valuation

Plant & Equipment Valuation is a study that generates an opinion of value on building machinery, plant machinery, transportation equipment, and other mechanical assets.

Plant & Equipment (PE) Valuation is used for:

  • Financial reporting
  • Tax Compliance
  • Buy or Sell Decisions
  • Collateral Evaluation
  • Insurance

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We conduct Mechanical Engineering Valuation assignments in compliance with International Valuation Standard(IVS) 220 (Plant and Equipment) and International Accounting Standard 16 (Property, Plant and Equipment) assuring reliable estimates of value.

We typically adopt the Cost Approach and Market Approach in valuation, employing particular estimation techniques such as the Factorial Method, Direct or Comparable Match Method and Breakdown Method. Typically used for Financial Reporting purposes, Mechanical Engineering Valuation may be conducted on an annual basis depending on a company’s revaluation requirement.

Business Valuation

A business valuation is a study or process that generates an opinion of value for a business interest such as: shares of stock, trademarks, brand names, air rights and other tangible and intangible business assets that generate economic benefits for their owners.

Business valuation applications include:

  • Mergers & Acquisitions
  • Financing
  • Investment
  • IPOs
  • Financial reporting

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Aviso conducts Business valuation assignments in compliance with International Valuation Standard and International Accounting Standard assuring reliable estimates of value.

Aviso also conducts Business valuation assignments following a standard appraisal process and an array of approaches and methods to address the specific needs of each assignment. Aviso uses the Cost Approach, Market Approach and Income Approach in valuation, as well as cost estimation techniques such as the Factorial Method, Direct or Comparable Match Method and Breakdown Method. Typically used for Financial Reporting purposes, Mechanical Engineering Valuation may be conducted on an annual basis depending on a company’s revaluation policy.

FEASIBILITY | HIGHEST AND BEST USE | MARKET | TRANSPORT | SPECIAL STUDY

 

Feasibility Study

This study evaluates a development concept or project to determine its economic viability – in short, whether a project should be green-lighted or not. In a deepening financial market such as the Philippines, investors face a variety of investment options. The feasibility study is an investment planning tool that allows decision-makers to determine the merits of a project. Ideally, a feasibility study should be developed after the conceptualization, and design stage but before funding.

The feasibility study makes use of a discounted cash flow method under an investment analysis (or income) approach. The metrics generated by the study conform to best international practice as our consultants have experience working in foreign investment markets.

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Highest and Best Use Study

HABU Study, as it is often called, determines the optimal usage for a property -whether idle or underemployed- given prevailing property market conditions, legal, fiscal and physical limitations.

The study is critical for investment managers seeking to maximize the yield of owned properties. Ideally, a HABU study is applied at the middle and end (economic) lives of property improvements. The study makes use of a benefit-cost analyses methodology using a comparable market approach. A properly-implemented HABU program ensures that properties are optimally developed, generating the highest possible yields for their owners.

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Market Study

Market information is a strategic asset critical to success. This is why Aviso regularly conducts various types (real estate, hospitality, power, transportation, etc.) of market studies to gather, process and analyze data for our clients. In fact, we are one of the few companies that regularly conduct field research as part of the process of generating financial models for valuation and other analytical needs. Clients can, however, request a stand-alone market intelligence study for their own internal use.

Aviso market intelligence report follows our own proprietary format arranged according to market characteristics such as size, growth, concentration, demand and supply factors and factor analytics. Past clients include multilateral agencies, multinational companies and private persons.

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Transport Study

A significant factor affecting the values of real assets –and their development- is accessibility and physical connectivity. A transportation study examines this value factor using metrics such as travel distance and time to determine how efficient a property is relative to its use. In addition, some investment planners would also have the study developed as part of their brand development program.

The approach employed in such studies varies depending on the information requested by the client. Typical assignments include activities such as accessibility mapping and computation of time-distance metrics via available modes of transport.

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Special Study

There are instances when studies call for specific approaches and methods not usually employed in the field of valuation. Such studies may require predicting outcomes (past or future) under unusual or unique conditions, or are usually economic in nature emphasizing use of statistical rather than financial analyses. Clients that request these studies are often times multilateral institutions such as the Asian Development Bank (ADB) or World Bank (WB).

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  • Agriculture
  • Food & Beverages
  • Chemicals
  • Consumer Products & Services
  • Education
  • Financial Services
  • Government
  • Healthcare
  • Insurance
  • Leisure, Media & Entertainment
  • Manufacturing
  • Mining
  • Oil & Gas
  • Paper & Forest Products
  • Pharmaceuticals
  • Professional Services
  • Real Estate
  • Technology & Electronics
  • Telecommunications
  • Tourism
  • Transportation
  • Utilities
  • Power

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