Valuation is the process of estimating what something is worth an is based on International Valuation Standards provisions.
Valuations are useful for investment analysis, transactions, financial reporting, taxable events, bank loans and litigation.
We can estimate the value of a business enterprises, brands, real estate or equipment. There are three main approaches in valuation, regardless of what asset is being valued:
| • Cost Approach– surmises that the price someone should pay for a piece of property should not exceed what someone would have to pay to build an equivalent building; |
| • Market Approach– studies recent sales of similar assets, making adjustments for differences in size, quantity or quality; |
| • Income Approach–estimatesthe value of an income-producing asset through capitalisation of the annual net income expected to be produced by during its remaining useful life. |