Valuation is the Technic of determining present fair value of property.
Value, the desirability of a think offen in respect of same property such as usefulness or exchangebility worth merit or important.
OR
Value is the corresponding exchange of One property to any other property is called as value of Property.
• The Simple but very Essential terms use in Valuation:-
1.COST: Cost is the actual amount incurred in producing a Commodity/Structure.
2.PRICE: It is the cost of Commodity/Structure plus profit of Manufacturers.
3.VALUE: Value is the Corresponding exchange of One Commodity to any other Commodity.
•Some main factors are Affecting value of property:-
1. Forces of Demand and Supply.
2. Cost of Construction.
3. Increase in Population.
4. Improvement of Public life.
5. Interest of Bank loan.
6. Inflation.
7. Cost of Labour.
8. Riotet,War, Flood and other Natural Disaster.
9. Monopoly of property in Market.
10. Location of property.
11. Life and Current age of property etc.
• There are various Types of Valuation:-
1. BOOK VALUE:
It is the amount shown in account book and can be obtained by deducting Depreciation up to previous year.
The Book Value of property for a perticular year is the original cost minus amount of Depreciation up to previous year.
Ex. Book Value of property in 2021 =
Original cost of property - Depreciation up to 2020
2. SCRAP VALUE:
It is the value of Dismental material when life of a Structure is over at the end of its utility period; the Dismental material such as Steel, Brass, Timber etc. will fage certain amount this amount called Scrap Value of property. It may be about 10% of its total cost of construction.
3. SALVAGE VALUE:
It is the value at the end of utility period without being Dismental, a machine after the completion of its usefull span of life may be sold the Sale Value at the end of utility period is called as Salvage Value.
4. SPECULATIVE VALUE:
There are certain purchasor/ Buyer to are interested in purchasing the property and then selling the property with profit after short period. Such purchase Speculate on the property and they are interested only in Earning profit, they are not interested in developing the property.
5. DISTRESS VALUE:
A property is said to have Distress value when it fetches lower value than the market value. The Distress value is develope due to,. - Fear of War, Riotet and Earthquake. - Financial difficulty of Seller.
6. MARCKET VALUE:
It is the amount which may be obtaine at any time from the open market when the property is kept for sell. The Market Value of property changes from time to time according to Demand and Supply.
7. MONOPOLY VALUE:
In some cases the property possess certain advantages with respect to adjoining property due to its size, Shape, Frontage, Location ect. Due to which that property gets Higher Value than Marcket Value.
8. SENTIMENTAL VALUE:
Some times some Sentiments and Feeling of the Owner are attach to the property and because of such sentiment he will not ready to sell his property even then Fancy Price is Offers to the property. This is the sentimental value which has no relation to Marcket Value.
9. DEPRECIATION :
A Property gradually losses some value due to its Wear and Tear and other similar causes this lost in value of property is called as Depreciation.
# CHARACTERISTICS OF VALUE:-
• Value changes from place to place.
• Value depends upon life of Structure and Location of property.
• Value changes according to low of demand and supply.
• Value is affected by natural disaster, riotes etc.
• Value can be classified as Book Value, Marcket Value, Scrap Value, Salvage Value etc.
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