18 Questions
What distinguishes 'Fair Value' from 'Market Value' in accounting?
Fair Value includes market and non-market values, while Market Value is specific to market transactions.
What challenges do valuers face when dealing with unique or rarely traded properties?
Limited market data makes it difficult to justify and explain value conclusions.
What should valuers do when market conditions deviate from true market value?
Strive to stick to the 'Market Value' concept and exercise careful judgment.
How do valuers handle scarce or less applicable market data while valuing assets?
They rely more on professional vigilance and expertise.
What must valuers do if a specific legal definition of 'Market Value' applies to their valuation?
Disclose the legal definition and its impact on the valuation.
What information should be clarified in valuation reports for financial reporting purposes?
Purpose, intended use, and asset classification for financial reporting.
What does 'Market Value' reflect?
A property's worth in a free and informed exchange
Why does real estate generally take longer to sell compared to most goods and services?
Because it lacks a spot market and is illiquid
What is the main reason 'Market Value' is preferred over 'Fair Market Value' in real estate valuation?
To avoid confusion with accounting terms
What is the main role of the concept of 'highest and best use' in determining a property's true market value?
Assessing the most probable and valuable use of the property
What does 'Highest and Best Use' require to be considered as defined?
Being physically, legally, and financially feasible
Why is 'Market Value' considered an objective valuation?
Because it reflects collective market perception based on market activity
What are the economic factors that influence the desirability of a property?
Income-generating potential and market demand
How can utility be assessed for properties?
Individually or as part of a larger group
What is a key consideration when valuing properties either individually or as part of a portfolio?
Market perspective
What is meant by 'special value' in property valuation?
Additional value beyond individual worth due to various factors
Why is it important to identify and report 'special value' separately from Market Value?
To provide a clearer picture of a property's true worth
How does considering individual and group contexts contribute to comprehensive property valuation?
It helps valuers arrive at accurate assessments
Test your knowledge on factors influencing property valuation including income-generating potential, market demand, sustainability, and individual vs. group property considerations.
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