VIVEK M.

JAGTAP
Chartered Engineer, B.E. Civil, M.I.V., F.I.V. is duly
registered IBBI ‘Registered Valuer’ for the asset class –
"Land & Building under Companies Act, 2013; and
accordingly, the Companies (Registered Valuers and
Valuation) Rules, 2017. ( Reg. No.
IBBI/RV/01/2019/10579) & also a Registered Valuer under
Wealth Tax Act, 1957 (u/s 34AB). ( Reg. No. CATI/54-
2004).
 an estimation of the worth of something, especially
one carried out by a professional valuer
 the monetary worth of something
In simple words, value of an asset in terms of
money.
A VALUER IS AN EXPERT WHOSE MANIFOLD
DUTIES ARE TO ESTIMATE THE FAIR VALUE OF
THE PROPERTY UNDER DIFFERENT SETS OF
CIRCUMSTANCES.
TERMS RELATED TO VALUATION:
 Cost: It is the expenditure to produce a
commodity having a value.
 PRICE: It is cost of a commodity plus
additional reward to the producer for his
labour and capital.
 Value is not inherent in the property itself,
but will be determined in the open market by
the forces like demand and supply.
 Value is a function of time, place, and
purpose.
COST IS A FACT
PRICE IS A POLICY
VALUE IS AN OPINION
 Land and building
 Agricultural lands
 Forests
 Mines and Quarries
 Stocks, Shares, Debentures
 Plant & Machinery
 Jewelry
 Works of Arts
 Purchasing for  Insurance
investment  Capital gains
 Purchasing for Self  Assessing property
Occupation tax
 Selling  Stamp duty
 Mortgaging  Partitions
 Income, Wealth Tax  Collateral Security
 Auction  Probate
 Present value of  Arbitration
Old properties
 Market Value: sum the
property will fetch if it is sold
in the open market.
 Guideline Value: value of the
land which is recorded in the
Registered of Registrars office
& used for the purpose of
determining the Stamp Duty at
the time of Registration of the
Documents.
 Book Value: original
investment of a Company on
its assets less depreciation for
the period passed.
 Present Value: It is
replacement value less
depreciation value
 Salvage Value: Value of
machinery realized on sales
when its useful span of life is
over but still it has not become
useful.
 Scrap Value: Junk Value or
Breakup Value or Demolition
Value. Value of old material-
cost of demolition
 Disposal Value: value that can
be realized if the assets were
to be removed from the
foundation and sold as
separate stand alone items
 Distress Value: If a Property Is
sold at a lower price than that
which can be obtained for it in
an open market, it is said to
have distressed value
 SUPPLY AND  RENT CONTROL
DEMAND ACT
 COST OF  URBAN LAND
PRODUCTION CEILING ACT
 OCCUPATIONAL  ANY ABNORMAL
VALUE CONDITIONS LIKR
 TOWN PLANNING WAR, RIOTS ETC
ACT
For determination of cost of construction of a building.
 Accounts method.
 Plinth Area Rate and Cost Index method.
 Detailed or item wise method.
 Material and labour contract method.
 Comparable method.

For determination of Fair Market Value of the property.

 Land and building method.
 Rent capitalisation method
 Development method.
 Profit method.
 Comparable method.
 Combination of more than one method for partly owner
occupied and partly tenanted property.
 Guidelines rates issued by local Authorities for relevant period
and location in respect of rates of land, construction, flats
commercial properties etc.
 By this method the  It consists in capitalising
value of the land and the Net Annual Rental
Income(NARI) at an
building are assesed appropriate rate of
separately and added interest or rate of
to get the present capitalising.
value of the property.  Net Annual Rent Income
equals to Gross Annual
Rental Income(GARI)
minus outgoings like
taxex, repairs and
maintenance etc.

1.LAND AND BUILDING 2.RENT CAPITALISATION

METHOD METHOD
3.Development/residual
method Profit method

 This method is applicable

 This method is used to Hotels, Cinema,
to evaluate such Theatres, Marriage Halls
property where there and Public Places.
 It deals in working the
is development profit from a property and
potential, so that the subsequently capitalising
value of property of the same at appropriate
after the development rate of return depending
upon a number of factors.
will be increased  Net Profit to be adopted
more than the should be average of last
expenditure incurred. 3 years profit.
 Valuation should be realistic depending on
the nature of property, its use, potential and
all other characteristics. A valuer of land and
buildings needs the knowledge of.
 (i)Purpose, time and place of valuation.
 (ii) Laws relating to valuation.
 (iii)Building industry including method of
construction, structural arrangements,
specifications, type of foundations finishing
and services provided etc.
 (iv)Plant and machineries installed.