![]() ![]() ![]() ![]() That said, it’s not a distinction worth the investment of much time or mental effort. ![]() Here is the distinction we make: Evaluations of financial reports, assets, comparables, multiples, and more are the assessments we do to gather the information we need to prepare valuation estimates and reports. Others might define each slightly differently, or conclude there is no difference between the two. Evaluation describes a more informal, ad hoc assessment a valuation is a formal report that covers all aspects of value with supporting documentation. However, there is a difference between evaluation vs. EvaluationĪt Valentiam, we consider business appraisal or valuation to be terms for describing the same thing. In this article, we’ll compare these terms and their meanings, and the process they are used to describe. Instead, valuation companies and appraisers each seem to have their own ideas about the terms and how, or if, they differ. But in practice, the terms are used interchangeably and there is no legal difference in the definitions, nor any authoritative body that has assigned a definitive difference of meaning. appraisal, etc.), you will find a number of articles that attempt to draw distinctions. valuation, or any combination that reverses the terms (valuation vs. If you do a Google search for evaluation vs. Opinions about the differences-or whether they actually have different meanings at all-are all over the map. a valuation? Is there a difference between all these terms? And if so, what do they all mean? Put differently, it is the determination in monetary term the worth or value at specified date and for special purpose of the property rights encompassed in ownership.Discussions of business valuation often use the terms appraisal, valuation, and evaluation interchangeably, which raises the question: What is valuation vs. Generally speaking valuation is the process of making an estimate or worth of real property or other assets for a particular purpose. This is a person who has undergone academic training and has acquired practical experience, recognized as a valuer by Estate Surveyors and Valuers Registration Board of Nigeria (E.S.V.A.R.B.O.N). The one so authorized by law in Nigeria to carry out valuation is called an Estate Surveyor and Valuer. The basis of valuation is having bearing on the method(s) to be adopted by the valuer: the purposes for which a valuation is being required include, sale, purchase, mortgage, rating and taxation, probate, insurance, compulsory acquisition, rental etc.įor a report to be recognized as a valuation report, it must be prepared by one authorized. The purpose of valuation leads to the basis of valuation, which is to be determined by valuer. Valuation is always been carried out for a specific purpose or purposes which is or are to be determined by the client. The value arrived at today, would be different from what may likely be determined on the same property in ten years time. The date of valuation is presumed to mean the day on which tape measurements and market surveys were carried out. The modification of value is always been brought about by economic, social, political and governmental changes over time. The impact of inflation or deflation on the values of commodities is an element of time. The passage of time has been having direct effect on value of property especially in an unstable economy of developing nations. The essential portion of the definition is the specific date. The presentation and communication of the rigorous data collection and analysis (the scientific aspect of valuation) makes valuation an art. The final presentation of valuation report requires good composition excellence of style and clarity of expression-the essential features of art. All the above make a valuation to be regarded as a science. Also, it involves engaging rational and measured investigation and reasoning after systematic collection and analysis of data. It is a form of social science which provides a solution to a question "how much?''. Ifediora, (1993:7) considers valuation as the art and science of determining, at some specific date, for a specific purpose or purposes and by one authorized, the monetary value of the property rights encompassed in an ownership and the value so determined. He particularly included time in the definition as a major determinant of value. It was also seen as the estimation of the capital or rental value of land and/or buildings at a certain time. For instance, Baum and Crosby (1988) refer it to the estimation of the open market value or the prediction of the most likely selling price. The definitions of valuation were given by various scholars. ![]()
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