Valuation of movable property

Vietnam is entering a period of strong economic and social development, especially the reputation of the investment environment for international investors. When entering the economy, the concept of valuation, asset valuation has become familiar to businesses, entrepreneurs as well as those operating in the economy.

In the economic category, any asset from: lots of land, factories, ships, cars ... to intangible assets such as brand, investment license, management model, ownership Intellectual property ... are priced at specific values ​​of money. In which, the properties of real estate have become the popular subject of price appraisal today.

1. What is real estate?

According to Clause 2, Article 174 of the 2005 Civil Code clearly states: “Real estate is property not real estate”. So, before understanding what real estate is, we need to know what real estate is and from there excluding assets belonging to real estate, the rest is real estate. According to Article 107 of the Civil Code of the Socialist Republic of Vietnam 2015, real estate includes: Land; Houses, construction works attached to land; Other property attached to land, house, construction works; Other properties as provided by law. Thus, it can be generally understood: real estate includes land and assets attached to land, not separate from land, determined by the geographical location of the land.

From there, we can understand Real Estate is any property that meets the criteria of being able to move or move, including:

- Machinery, equipment, technological lines;

- Workshop, specialized equipment, materials;

- Means of transports;

- Other goods and services ...

2. What is real estate valuation?

The concept of real estate valuation is extended from the concept of property valuation in general. Valuation is the evaluation or reassessment of the value of assets in accordance with the market at a certain time according to Vietnamese standards or international practices. From there, real estate valuation is understood as an estimate of the value of specific property titles in monetary form for a well-defined purpose under certain market conditions. with suitable methods. 

In which, depending on the specific cases and purposes of appraisal, the determination of market value and non-market value is the basis for real estate valuation. Individuals and agencies doing valuation work are independent units capable of accurately determining the value of assets based on appropriate regulations and methods.

3. Real Estate Valuation included

• Unused property (new purchase).
• Used property:

Used property means an asset that no longer meets the specifications and quality standards originally prescribed by the manufacturer due to the preservation process or has been commissioned or commissioned.

With the common characteristic of real estate assets that the remaining quality is uneven, details and parts have been changed, repaired or upgraded to suit the use purpose, the identification of the such as property characteristics, production capacity, production conditions, preservation, maintenance ... will serve as a basis for individuals, organizations doing price appraisal can choose the basis of appraisal, method, Appropriate evaluation principles.

In which, the value of the used asset can be used. One of the two appraisal bases is the market value basis and the non-market value basis depending on the level of popularity, the proportion of substances. the remaining amount of assets subject to valuation and evaluation purposes.

• The property is no longer valid

When an asset is no longer in use, the level of remaining value is known as the liquidation value. In other words, liquidation value is the estimated value obtained at the end of the useful life of an asset after subtracting the estimated liquidation costs.

The appraisal of the price of real estate when it is no longer valid for the purpose of use is a complicated and meticulous work due to the separation and classification of the components that make up that asset, estimating the weight. when not qualified to weigh, measure, count, and test specific for each asset. In addition, it is possible or impossible to accurately determine the use of components and details of liquidated assets, which are still used because in reality are not equal, causing difficulties in determining the value of assets. .

4. Purpose of real estate valuation

Depending on the needs of the subject to be assessed, the purposes of valuation are different, but generally include the following purposes:

• Property mortgage, credit guarantee;
• Purchase, sale, transfer, joint venture capital contribution;
• Enterprise establishment, enterprise equitization;
• Debt settlement, business dissolution;
• Compensation, insurance, claims;
• Accounting plan, tax calculation;
• Consulting and setting up investment projects;
• Other purposes;

5. Property valuation method

Like the method of appraisal of other assets such as real estate, businesses, investment projects, natural resources ... The methods of real estate valuation include:

a. Direct comparison / comparison method

Direct comparison method is a method of estimating the market value of an asset based on an analysis of the price of similar assets used to compare with an asset subject to valuation that was successfully traded or in progress. actual purchase-sale in the market at the time of price appraisal to estimate the market value of assets subject to valuation.

Similar properties to assets subject to price appraisal have the following basic characteristics:

• Has similar physical characteristics.
• There are similar basic economic and technical parameters.
• Have the same function, purpose of use.
• Equal quality.
• In use, can be interchangeable.

b. Discount cost method

A price appraisal method based on the cost of creating an asset equivalent to the asset under valuation minus the actual depreciation of the asset under valuation (if any) to estimate the value of the asset. need price appraisal. The requirement for the discount cost method is that an assessor must have technical expertise and sufficient experience to apply this method, in particular:

• Determine the current cost of creating an asset similar to the asset under valuation at the time of appraisal.
• Determining the cumulative depreciation for machinery and equipment that need price appraisal.

c. Investment method (traditional investment method / technical discounted cash flow)

d. Residual method (or method of business analysis / hypothetical growth)

e. Profit method and other methods ...

6. Estate valuation documents

• Request for price appraisal (form)
• List of assets, economic contracts for sale, ... (for machinery and equipment)
• Registration certificate, registration book, ... (for vehicles).
• Certificate of registration, inland waterway vessels, certificates of technical safety, ... (for ships).
• Origin of goods: country of manufacture, year of manufacture;
• Commercial contract, customs declaration, ... (for imported property).

Using Hoang Quan valuation service, customers will be guided in detail in building appraisal documents for each specific asset object.

7. Real Estate Characteristics and Valuation

Like real estate, the market for machinery and equipment, technology lines, factories, equipment, materials and goods are collectively referred to as the real estate market as the "place" where transactions take place. , leasing, mortgage and related services such as intermediaries, brokers, consulting ... related to real estate between subjects participating in the market.

Property prices depend largely on the relationship between supply and demand in the market. According to the price appraisal standard No. 01 issued under Decision No. 24/2005 / QD-BTC dated April 18, 2005 of the Ministry of Finance: The market price of real estate is the estimated price being traded on the market. at the time of valuation between one party who is willing to buy and the other who is willing to sell in an objective and independent transaction under normal commercial conditions.

However, the price of real estate is also dependent on many other factors such as market imbalance due to many unforeseen reasons such as monopoly, speculation, and non-competitive factors. healthy ... there are factors stemming from the intervention of State policies such as adjustment of tax policy, import limit ...

Property appraisal service is one of the strengths of Hoang Quan Valuation Company. With abundant price data, human resources with high professional experience, Hoang Quan Valuation will provide customers with information about the value of real estate with high reliability in each item. evaluation destination.

Hoang Quan Valuation Company Limited - Hanoi Branch

Hotline: +84901.186.700

Email: cskh.hanoi@hqa.com.vn