International Valuation Standards

International Valuation Standards: a guide to the valuation of real property assets is an essential road map to using the new International Valuation Standards in everyday practice for real estate assets, explains their content, application and operation. It shows how to value assets including property, plant and equipment and is written in an explanatory style using commonly understood business English with as little jargon as possible. It takes a thematic format, focusing on the application of IVSs to investment property and owner-occupied property with the author addressing valuation instruction, operation and reporting under IVSs.

Autorentext

Professor David Parker is an internationally recognised property industry expert on both the theory and practice of REITs, and a highly regarded property academic, being a director and adviser to property investment groups including listed real estate investment trusts, unlisted funds and private property businesses (www.davidparker.com.au). Professor Parker is currently the inaugural Professor of Property at the University of South Australia, an Adjunct Professor of Property at the University of Queensland, a Visiting Fellow at the University of Ulster and an Acting Commissioner of the Land and Environment Court of New South Wales. With over 25 years experience in all aspects of property fund management, portfolio management, asset management and property management as well as in property valuation, Professor Parker previously held senior executive positions with Schroders Property Fund and ANZ Funds Management. Professor Parker consults widely to REITs and property funds, having developed Clarity(r), a proprietorial research based property investment decision making process linking corporate vision to individual property assets. Holding BSc, MComm, MBA and PhD degrees, Professor Parker is a Fellow of the RICS, the Australian Institute of Company Directors, the Australian Property Institute, the Australian Institute of Management and the Financial Services Institute of Australasia. He is a member of the Society of Property Researchers, the American Real Estate and Urban Economics Association and the European, American and Pacific Rim Real Estate Societies. The author of numerous papers published in academic and industry journals, Professor Parker is a regular conference presenter around the world and Editorial Board Member for the highly ranked Journal of Property Research, the Pacific Rim Property Research Journal and Property Management.

Inhalt
Foreword xv

About the Author xvii

Preface xix

Acknowledgements xxi

Introduction 1

1 Market Value 3

1.0 Introduction 3

1.1 Globalisation and valuation 4

1.1.1 Globalisation 5

1.1.2 International Financial Reporting Standards 6

1.1.3 Valuation 8

1.2 Evolution of valuation standard setting 10

1.2.1 Principal phases 10

1.2.2 Role of IVSC 12

1.2.3 Role of IVSs 13

1.2.3.1 Structure of IVSs 13

1.2.3.2 International, Regional and National Valuation Standards 16

1.3 Market value 17

1.3.1 Spencer concept of market value 18

1.3.2 IVS definition of market value 20

1.3.2.1 Estimated amount 22

1.3.2.2 An asset should exchange 23

1.3.2.3 On the valuation date 23

1.3.2.4 Between a willing buyer 23

1.3.2.5 And a willing seller 24

1.3.2.6 In an arm's length transaction 25

1.3.2.7 After proper marketing 25

1.3.2.8 Where the parties had each acted knowledgably, prudently 26

1.3.2.9 And without compulsion 27

1.3.3 Highest and best use assumption 28

1.3.4 Transaction costs assumption 29

1.3.5 Market value in practice 30

1.4 Businesses and business interests, intangible assets and financial instruments 31

1.4.1 Businesses and business interests 31

1.4.2 Intangible assets 32

1.4.3 Financial instruments 32

1.5 Summary and conclusions 33

References 35

2 Concepts 37

2.0 Introduction 37

2.1 Conceptual framework 38

2.1.1 Approaching IVSs through economic theory 40

2.1.2 Concept of exchange 43

2.1.3 Conceptual framework summary 46

2.2 Reconciliation with capital market theory 48

2.3 Definition of the market 50

2.3.1 What is a market? 50

2.3.2 Who are the participants in a market? 53

2.3.3 What is the role of market activity? 54

2.3.4 What is an asset? 56

2.3.5 Definition of the market summary 57

2.4 Value vs. cost vs. price 58

2.4.1 Price 58

2.4.2 Cost 58

2.4.3 Value 59

2.4.3.1 Market value 60

2.4.3.2 Investment value 62

2.4.3.3 Synergistic value 65

2.4.3.4 Fair value 67

2.4.3.5 Special value 70

2.4.3.6 Relative contribution to value 72

2.4.4 Reconciliation to the conceptual framework for valuation 73

2.5 Summary and conclusions 74

References 77

3 Definitions 79

3.0 Introduction 79

3.1 Definition of valuation 80

3.1.1 What is valuation? 81

3.1.2 What is value? 82

3.1.3 What is a basis of value? 82

3.1.4 What is a valuation input? 86

3.1.5 What is an assumption? 89

3.1.6 What is a special assumption? 90

3.1.7 Definition of valuation summary 92

3.2 Definition of contextual terms 93

3.2.1 Real estate 93

3.2.2 Real property 94

3.2.3 Investment property 96

3.2.4 Trade related property 97

3.2.5 Intangible asset 98

3.2.6 Goodwill 98

3.2.7 Market rent 98

3.2.8 Definition of contextual terms summary 99

3.3 Principal approaches to valuation 99

3.3.1 Cost approach 100

3.3.2 Income approach 102

3.3.2.1 Income capitalisation 102

3.3.2.2 Discounted cash flow 104

3.3.2.3 Option pricing models 105

3.3.3 Market approach 105

3.3.3.1 Accumulation step 106

3.3.3.2 Analysis step 107

3.3.3.3 Adjustment step 107

3.3.3.4 Application step 108

3.3.3.5 Market approach summary 109

3.3.4 Principal approaches to valuation summary 109

3.4 Summary and conclusions 110 References 111...