10/28/2019

The Brief Report on History of Asset

Valuation Project at AAU-DAAF
26/10/2019
By: Mintesinot Adnew

When was it started?

• I conceived the Idea back in 2017 (in testimony to this
please see the ‘benefits of working with us’ sections our
IFRS training and conversion Proposals, and Management
Briefing slides or see the red marked text in the next slide)
– I scribbled some ideas about the project in the same year
– I insisted my successors to follow suit but they were not
interested to take further steps
• August 2019
– I reignited the idea during the after-meeting Discussions with
EPSA team
– I informed them about AAU’s asset valuation potential
– I Got a green light
– I reported the potential to Mr. Endalkachew
– Started working on the proposal

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Benefits of Working with AAU

•Counting on our •We have tested
seasoned staffs with experience of providing
relevant industry full-fledged IFRS
experience, we work training, conversion,
with your team hand asset valuation, and
in hand to build your related support to big
staff capacity company names in
ensuring mutual Ethiopia
benefit and long-term Integrated
Industry-University Reliability
linkage Services

Strong
Ethiopianized Relationship
Contexts With AABE and
Other
Stakeholders
•Our understanding of • The university
international best
practices and deep makes IFRS as a
knowledge on Ethiopian national
practices and legal responsibility
requirements enable us
to develop high
standard services with
local relevance

When was it started…ctd

• September 2019
– Developed the idea to a full fledged proposal
– The proposal further grows and benefited from
• Reviews by Dr. Teferi G.
• Additional Information from asset valuation training participants
• Comments from the valuers outside of DAAF
– Feasibility of the project
– Staffing
– Scheduling and
– Budget
– The proposal convinced the client and modified to
• Training service delivery first and Consultancy service to follow
• Split the proposal into training and consultancy parts

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My Objectives for Drafting the Project

Proposal
1. Enhance the Department’s competitiveness by
introducing high quality asset valuation services
to our IFRS conversion services
2. Ensure staffs of the Department acquire asset
valuation experience through knowledge
transfer from experienced External valuers
3. Enhance client satisfaction through high quality
asset valuation results with minimum time
possible

Major Deliverables and Progress So Far

Deliverable Remarks
Comprehensive Asset 1. Successful with minor interruptions
2. The irregularities were communicated to training
Valuation Training coordinators immediately!
3. End-training report has been submitted to the training
coordination team on overall performance

Kick-off Training Training was interrupted by the committee members to

the disgrace of the Department’s reputation. I had to
make crisis management to clear the artificial mess
created by the committee to the satisfaction of the client
Asset Valuation PPM No done yet!

Valuation Formats and Formats were communicated to the client during the
training but lack the accounting data components . The
Report Templates revised versions were given to the client

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Major Deliverables & Progress

Deliverable Remarks
Field Visits There are 20 valuation sites
including the head quarter of EPSA
Valuation review Will be used as an off-site Quality
Assurance
Comprehensive valuation Reviewed for use by IFRS
report consultants
Review by Valuer External  The external auditor (ASC)
exempted the Agency from
doing this
 As a result the entire quality
check will be shouldered by AAU

Staff Profile
Name Of Role in the
Qualification(s) Valuation related Experience
Consultant Project
Eng. Bisrat Lead Engineering (Agricultural  Business Valuation 28
Eshetu Valuer & Construction) & MBA  Asset Valuation 15
 Valuation reviews 2
 Asset Valuation Trainings 5

Eng. Eisa Senior Engineering (Agricultural  Business Valuation 13

Addisu Valuer & Construction)  Asset Valuations 13
Mr. Daniel Senior MBA  Business Valuations 3
Getachew Valuer  Asset Valuations 18
Mr. Abreham Senior MSC in Economics  Business Valuation 4
Fekede Valuer  Asset Valuations 3
Eng. Surafel Valuer Engineering (Water &  Asset Valuation of 5
Eyasu Construction) Companies

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Nature of Assets in 20 Locations

A. Non-Financial Asset B. Leased Asset
1. Warehouses 1. Lease liability
• Own warehouses
2. Right of Use Asset-
• Rented warehouses
Warehouse
2. Office Buildings including
Heritage Asset C. Intangible Assets
3. Land and Land 1. HCMIS
Improvements 2. GPS
4. Equipments & 3. ERP
Machineries
5. Vehicles
6. Office Equipment
Furniture

Tentative Itinerary to 20 Sites

Group-I Group-II Group-III
1. Addis Ababa-1 1. Gonder 1. Bahir Dar
2. Addis Ababa 2 2. Mekelle 2. Nekemt
3. Adama 3. Shire 3. Assosa
4. Desse 4. Jimma 4. Hawassa
5. Semmera 5. Gambella 5. Negelle B
6. Diredawa 6. Kebri dahar 6. Arbaminch
7. Jigjiga
Head Office (All groups)

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Staff Involvement
– Total Requirement
• 8 Persons
– AAU-DAAF
» 3 Staffs
– Non-AAU
» 5 Staffs
– Knowledge Transfer Plan
• The 3 staffs of DAAF will disseminate the acquired skills
to other Departmental Staffs in upcoming IPSAS
projects that require asset valuation service

The Financial Proposal

Original Offer Revised Offer after Negotiation
(Submitted to Client) (Not Submitted to Client)

Budget Line Item Allocated Budget Line Item Allocated

Budget Budget
Consultants’ Remuneration 980,000.00 Consultants’ Remuneration 900,475.00
Institutional Overhead (15%) 147,000.00 Institutional Overhead (15%) 135,071.25
Price Before VAT 1,127,000.00 Price Before VAT 1,035,546.25
VAT 169,050.00 VAT 155,331.94
Total contract Price 1,296,050.00 Total contract Price 1,190,878.19

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Budget Allocation
•Budget Allocation
AAU ETB 628,081.31
Non-AAU ETB 562,796.88

Staffs Group-I Group-II Group-III Total Budget Allocation

External
Valuers #2 #2 #1 5 612,500 562,800
AAU-DAAF 367,500 337,600
Staffs #1 #1 #1 3
Total 3 3 2 8 980,000 900,400
Average Rate per person before tax = 122,500 112,600
Average Rate per person before tax = 85,750 78,791

Declaration
• I took self initiation and have done this project from scratch
• I have not deceived anyone with wrong information in the process
• I have submitted the project to the Department’s consultancy
committee: there is no hidden agenda from my side
• I continuously informed all concerned parties in the progress of
the training and consultancy services
• I planned the project in a manner that will keep the interest of all
parties involved
– Addis Ababa University
– The Client
– The External Valuers
• I strongly believe that the rational of previously floated expression
of interest was correct- there is no criteria in the world other than
asking related work experience to make staff selection.

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My Final Suggestion
• Projects should be executed in the way they are
designed to be
• The staff selection criteria should be
– Experience in Related area (Asset valuation, Asset
Valuation Review and Asset Valuation Training)
– Financial Equity
• Only members of IFRS conversion team for EPSA
should be eligible
• Only 3 consultants should be assigned to the
project

Thank You!