Market Price And Market Value

See: Orders of the Ministry of Economic Development of Russia of July 20, 2007 N 256 “On approval of the federal standard of assessment” General notions of assessment, approaches to assessment and requirements for assessment (FSO N 1) “and N 255” On approval of the federal standard of assessment “Purpose estimates and types of value (FSO N 2) “// Russian newspaper. 2007

What should a bailiff follow when making an assessment?

Price and market value:

First of all, attention should be paid to the fact that the Law on Enforcement Proceedings uses such a term as “market price”. ——————————–

In economic theory, the terms “price” and “value” carry different meanings of meaning. Under the value is commonly understood the monetary value of the consumer utility of the property, and the price is the amount of money for which the economic good is sold and bought. Thus, price is a form of expression of the value of goods, manifested in the process of their exchange. In this formulation, there are two fundamental aspects. First, the direct connection of the price of a commodity with the value and usefulness that it possesses as an object of consumption is emphasized. Secondly, according to this interpretation, the price of a commodity is manifested as an economic entity only when it is exchanged for money or another commodity. Consequently, out of the market, without a sale, there is no need to talk about price, only the market is able to set the price.

From the above it follows that in the conditions of free sale of property on the open market (that is, not at regulated prices), the price at which this property is bought and sold

Maybe this is why the phrase “market prices” is not used in the Federal Law “On appraisal activity in the Russian Federation”, and its concept of price is already incorporated as market value. In addition, in the sense of the Federal Law “On appraisal activity in the Russian Federation”, the result of professional appraisal activity is the establishment of a market or a different value, but not a market price.

So, the subject property of a professional appraiser can be a specific property and its consumer utility, the purpose of an appraisal of a professional appraiser is to determine the value of the property (but not its price), and the price is set by the market.

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Hues, in accordance with paragraphs 4, 5 of the federal standard of valuation “General concepts of appraisal, approaches to appraisal and requirements for appraisal (FSO N 1)” when determining the price of an appraisal object, the monetary amount proposed, requested or paid for evaluation by participants of a perfect or planned transaction; in determining the value of the property being appraised, the estimated value of the property being evaluated is determined, determined at the valuation date in accordance with the selected cost type. Making a deal with the object of valuation is not a necessary condition for establishing its value.

It is interesting to pay attention to the fact that in the Law on Executive Procedure the term “cost” is used rather arbitrarily. For example, according to paragraph 4 of Art. 91 of the Law on Enforcement Proceedings, the bidding is declared failed if the person who won the bid did not pay the full value of within five days from the day of the bidding. In this case, we are talking about the price of a particular concluded transaction, at which the property must be paid, i.e. obviously, the payment should have been made at the price (and not the cost) of the contract concluded at the auction. Thus, the term “value” is used here as a sum of money offered and requested for the property by the parties to the transaction, i.e. in fact, we are talking about price, and not about cost as an estimated value.

At the same time in h. H. 8, 9, Art. 87 and Part 2 of Art. 89 of the Law on Enforcement Proceedings, the term “value” is used as a calculated value by which the property can be put up for auction or offered to buyers. The price of the property will be determined at the conclusion of the contract.

Property Valuation Of The Enterprise

Types of property valuation of the enterprise:

Depending on the types of accounting objects related to assets in the form of property, the nature of their acquisition and economic conditions, the following types of property valuation are used in accounting:

At the actual initial cost (cost) , which is determined by the actual cost of acquisition or production of a particular type of property. Property valuation at the actual cost of acquisition or production is the main estimate used in accounting during the entire life cycle of the property. The property of long-term use is reflected in the financial statements at residual value (the book value of the property less accumulated depreciation);

At the current (replacement) cost – the cost that must be paid or with which the equivalent replacement should be carried out in case of need to replace any types of property;

At the current market value (the price of a possible realization) , i.e. at a value that can be obtained as a result of the possible sale of the object or at the time of its liquidation.

In the Russian accounting system, an organization can use valuation at market value, as a rule, when accepting for accounting certain types of assets when they are received free of charge, returnable materials received from the liquidation of fixed assets, work in progress, etc. Accounting items related to funds in calculations and liabilities are reflected in accounting and reporting in amounts determined taking into account interest (income) stipulated by economic contracts.

The valuation of the property of an enterprise is carried out on certain dates of business operations, as a result of which it is accepted for accounting in the organization. These dates can be:

  • The date of receipt of ownership of the property;
  • The date indicated in the inventory list;
  • Reporting date – as of December 31 of the reporting year;
  • Date of transfer of ownership of the property to the new owner.
  • Types of property valuation of the enterprise

Depending on the types of accounting objects related to assets in the form of property, the nature of their acquisition and the economic situation, the following types of valuation are used in accounting:

At the actual initial cost (cost), which is determined by the actual cost of acquisition or production of a particular type of property. Property valuation at the actual cost of acquisition or production is the main estimate used in accounting during the entire life cycle of the property. The property of long-term use is reflected in the financial statements at residual value (the book value of the property less accumulated depreciation);

At the current (replacement) cost – the cost that must be paid or with which the equivalent replacement should be carried out in case of need to replace any types of property;

At the current market value (the price of a possible realization), i.e. at a value that can be obtained as a result of the possible sale of the property or at the time of its liquidation.

The valuation of the property of an enterprise is carried out on certain dates of business operations, as a result of which it is accepted for accounting in the organization.

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These dates can be:

Share on page Types of property valuation:

Types of property valuation depend on the purpose of its implementation and are as follows:

Property valuation of enterprises and its shares. It is a set of actions, the purpose of which is to establish the value of a firm’s assets that can or will be profitable;

Real estate valuation. Promotes the implementation of profitable transactions, the adoption of productive decisions of their conduct;

Assessment of damage to property from natural disasters, gulf, fire, unlawful actions of persons or government agencies;

Land valuation. Determining the value of one or more land plots;

Assessment of housing (apartments) . It may include both a full definition of the cost of housing and a share of the property;

Road transport assessment. The process of determining the value of the vehicle on the market at present;

Evaluation of machinery and equipment. The goal is to determine the real value. Two approaches are applied: analogue and depreciated replacement-cost valuation.;

Damage assessment from a traffic accident:

For each type of property valuation, there are special methods and approaches that allow you to most accurately and reliably determine the value of the property.

The Market Value Of The Debtor’s Property

  • Thus, the bailiff in the process of valuation of the debtor’s property must determine the market value of the debtor’s property for its subsequent sale at the market price.

According to Art. 3 of the Federal Law “On appraisal activity in the Russian Federation”, the market value of the appraisal object is the most likely price at which the appraisable object can be alienated on the open market in a competitive environment, when the parties to the transaction act reasonably, have all the necessary information, and transaction prices do not reflect any extraordinary circumstances, i.e. when:

One of the parties to the transaction is not obliged to dispose of the object of evaluation, and the other party is not obliged to accept execution;

  1. The parties to the transaction are well aware of the subject matter of the transaction and act in their own interests;
  2. The object of valuation is represented on the open market by means of a public offer, typical for similar objects of valuation;
  3. The transaction price is a reasonable reward for the object of evaluation and coercion to make a transaction with respect to the parties to the transaction;
  4. Payment for the property being valued is expressed in cash.

It should be noted that in theory and judicial practice on the issue of determining the market price in the enforcement proceedings there were different points of view. These include the following:

1) The market value in the enforcement proceedings should be defined as the liquidation value [347] . Liquidation value is understood as

Estimated value that reflects the most probable price at which a given object of valuation may be alienated during the exposure period of the object of valuation, less than the typical exposure period for market conditions, in conditions when the seller is forced to make a transaction for the alienation of property. In determining the liquidation value, as opposed to determining the market value, the effect of extraordinary circumstances is taken into account, forcing the seller to sell the object of valuation under conditions that do not correspond to market value 1 . It should be noted that the determination of the liquidation value is fully consistent with the conditions for the implementation of the object of evaluation in the framework of the enforcement proceedings;

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2) the market value in the enforcement proceedings means a special value, which is also a market value established for the purposes of the enforcement proceedings, but with the use of a reduction factor, taking into account the forced and forced nature of the sale of property 2 ;

3) in determining the market value of the seized property in the enforcement proceedings, no specifics exist. A number of courts believe that the market value in the framework of enforcement proceedings should be determined in full compliance with Art. 3 of the Federal Law “On valuation activities in the Russian Federation” 3 .

☆ So, for example, in the Decree of the FAS of the Urals District of June 28, 2007 No. Ф09- 4910/07-С1 in case No. А71-9719 / 06 4 it is expressly stated that the arguments on the legality of its liquidation value when determining the market value of the seized property contrary to the provisions of the Law on Enforcement Procedure.

We believe that the bailiff or appraiser, determining the market value of the seized property in the enforcement proceedings, should take into account not only the individual characteristics of the subject property, such as: improvement or deterioration of the property, its encumbrance, but that it is affected by such factors such as compulsory sale, urgency of sale (Article 87 of the Law on Enforcement Proceedings set a short deadline for implementation), the possibility of disputes, etc.

Thus, it is obvious that a certain value and the selling price of the debtor’s property at which it can be sold as part of the enforcement proceedings is always slightly lower than the price at which the property could be alienated by the debtor .

Property And Voluntary

The term “valuation” means an independent opinion on value, which is based on a detailed analysis of the object. Meanwhile, the procedure for assessing the property of the organization is also a regulated by the law process of determining and justifying the price of an object for various purposes in monetary terms. That is, in some cases, the assessment of the organization’s property is also caused by legislative objectives – for example, when the enterprise is liquidated. There is a need to determine the market value of the property and economic goals, expediency – after all, often to make certain decisions it is necessary to know the value not only of the market price of the whole business as a whole, but also of individual elements of the property Why do you need to assess the organization’s assets?

  1. Increase the effectiveness of current management practices of the organization;
  2. Determination of the price of securities in the event of the purchase and sale of shares of the organization on the stock market. A sound investment decision is taken only in those cases when there is a clear idea of ​​the price of the enterprise’s ownership, or its share attributable to a certain shareholding. Important in the procedure is the evaluation of possible future income from business;
  3. Determination of the value of the organization in the case of a purchase or a whole or only a part;
  4. Enterprise Restructuring – Legislation requires an independent appraisal of the organization’s assets upon liquidation, merger or acquisition, or separation. Here it is important to determine the price of purchase or repurchase of shares, conversions, the amount of premium that is paid to the shareholders of the company being absorbed;
  5. Develop a plan for the development of the organization. In the process of strategic planning of the organization, it is very important to correctly assess the future profitability of the organization;
  6. Determination of the creditworthiness of the organization and the value of collateral in lending. In such cases, the valuation of the organization’s assets is necessary, since the value of the assets in the financial statements may differ materially from the market value;
  7. Taxation. When determining the taxable base, it is necessary to carry out an objective assessment of the company;
  8. Making informed management decisions. Inflation can significantly distort the financial statements of the organization, so periodically evaluating the property by an independent appraiser makes it possible to increase the realism of the output of reports, which will serve as a basis for making important financial decisions.

What does the organization’s property valuation include?

Evaluation of real estate. Determining the cost of buildings, buildings, and other structures that belong to the organization – and all that is somehow connected with the earth (objects whose displacement without sufficient damage is impossible).

Evaluation of the land. The land market valuation can depend on such factors as price level, competition in the land market, location, and market potential of the area, and also on the expected income from use. In addition, there are also specific factors related to the purpose of the assessed land (for example, fertile soil, etc.).

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Property and voluntary:

Evaluation of vehicles. Here we mean the valuation of cars, trucks, containers and other transport equipment. Also distinguish automobile vehicles, rail, air, sea, river and pipelines. Evaluation of vehicles can be carried out, either individually or as part of the property complex of the enterprise. The most common type of valuation is the evaluation of the car – it is carried out by calculating and correcting the price depending on the main pricing factors: year of production, initial cost, mileage, technical condition.

Evaluation of equipment. The cost of the whole range of movable property objects – technical complexes, devices and industrial devices, machine tools and technological installations, production lines and office equipment, furniture, household items and other objects that can be attributed to movable property is estimated. Evaluation of equipment is often the only option to determine the real value of the assets of the enterprise.

An obligatory independent assessment of the organization’s property and voluntary

An independent examination of the organization’s property may be voluntary or independent.

An obligatory assessment of the organization’s assets is carried out when objects partially or wholly owned by the state are involved in the transaction for the purpose of their privatization, lease, pledge or trust management. In addition, an independent assessment is also mandatory in cases where there is a dispute about the price of objects belonging to the Russian Federation when buying or seizing property from owners for municipal or state needs. The legislator points out the importance of conducting an independent examination in the event of a dispute over the calculation of the tax base, mortgage lending to individuals and legal entities, as well as when drawing up a marriage contract or when divorcing property.

Voluntary independent expertise is carried out with insurance, restructuring, revaluation of the taxable base of the company and in many other cases.

The company “Active Business Consulting” offers an assessment of the organization’s assets in a short time, but with the accuracy and scrupulousness that information deserves – the main foundation for making important decisions.

 

 

Property Valuation In The Town

When enter straight into the charter capital of a joint stock business, the property must calculate the market cost of shares paid by non monetary funds

In the scenario of this purchase of shares near the joint stock business at the demand of shareholders

When selling the enterprise or maybe component of this debtor’s property within the period of not inner management, when promoting the property in the program of bankruptcy proceedings.

Objects of compulsory and voluntary assessment:

  • Real estate objects
  • Buildings, dwellings (houses, apartments, cottages)
  • Land plots, forests
  • Air, space, sea or river vessels
  • Movable property
  • Machinery and equipment
  • Vehicles
  • Business
  • Revaluation
  • Shares and other primary and industrial securities
  • Shares and shares
  • Intellectual property (intangible assets)
  • Trademark
  • Patents
  • Goodwill
  • Know-how

A lot of operations are carried out with the help of voluntary assessment. Management decisions today are taken only on a comprehensive analysis of the market situation. The effectiveness of these decisions in most cases depends on an objective assessment of value. Only relying on its results, you can count on the maximum return on transactions with your property. So, very often it is necessary to revalue property, business, or assets of the enterprise. In such cases, the cost estimate is mandatory.

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Voluntary assessment is carried out in the following cases:

Evaluation of the investment project of a new business

In order to study the prospects for business development, a material assessment of the investment project is required. This assessment may show the likelihood of achieving the projected results and find reserves. An objective expert report can allow management to make the right decisions about the project.

Evaluation to improve the effectiveness of today’s management of the company (for personal internal use of its own)

Evaluation is used in two cases: 1) to identify redundant assets from which you need to get rid, as they aggravate production; 2) to find undervalued assets.

  • Valuation for the purpose of buying, selling a business or its part
  • Valuation for the purposes of additional issue, pledge of securities
  • Valuation for business restructuring purposes
  • Valuation for insurance purposes
  • Valuation for tax purposes
  • Determination of damage or loss of profits
  • Evaluation in case of voluntary liquidation of a business or a part thereof
  • Evaluation of certain types or separate objects of an enterprise’s property

Valuation for the purpose of revaluation of fixed assets when entering into the charter capital of a joint-stock company, the property needs to estimate the market price of shares paid by non-monetary funds

  • Valuation for the purpose of revaluation of fixed assets
  • Valuation for the purpose of revaluation of fixed assets Property valuation

Property valuation for inheritance

In order to get a quick assessment of the property to register your inheritance, you need to contact Evaluation Pro. Real and effective property valuation for the registration of inheritance is carried out by qualified specialists. They will prepare an evaluation report for the inheritance in a short period of time, as well as conduct a procedure for the preparation of evaluation lists.

Often, several owners become heirs. That is why it is so necessary to conduct a timely assessment of the property of your home. For each owner it is necessary to provide your own package of documents. Valuation of property for the registration of the inheritance is carried out, based on the location of your apartment. Evaluate the inheritance received as a gift, you can have experts. After the assessment of your property is much easier to formalize the property in the property, in particular, to issue an inheritance.

Valuation of property for inheritance includes inspection of the inherited property, obtaining documents for the purchase or sale of your property, viewing all information about your apartment, as well as obtaining a full package of documents for all your property. The valuation of the property is carried out based on the cadastral value.

Estimation of property is necessary for payment of the state duty, which implies entering into the inheritance, payment of the state duty gives a full guarantee that your property will be divided in strict accordance with regulatory legal acts. The property is valued based on the area of ​​your property, as well as on the date of acquisition of your property. The property acquired before 2005 is estimated much cheaper than the property acquired after 2005. A full evaluation of your property gives a full guarantee that the property will be divided into all heirs in strict accordance with the regulations. When creating an assessment of your property, specialists strive to make a qualified division of property between the addressees, as well as the division of property into owners.

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