...1 Assessment 4.2 Valuing the highest and best use — alternative use and asset modifications 4.3 Highest and best use and impairment testing 5. The valuation premise for property interests 6. Assessing whether an appraisal complies with IFRS 13 7. Appropriate valuation techniques 8. Applying the fair value hierarchy to real estate appraisals 9. Expanded disclosure requirements 10. Final thoughts 2 2 3 3 3 4 4 5 5 6 7 8 9 IFRS 13 Fair value measurement — 21st century real estate values Implications for the real estate and construction industries 1 1. Introduction IFRS 13 Fair Value Measurement has been recently released by the International Accounting Standard Board (IASB). 2. Principal impacts of the new standard For real estate entities, the adoption of IFRS 13 could result in significant changes to processes and procedures for determining fair value and providing the required disclosures. While the requirement to determine fair value by reference to market participants is not new, the definition of fair value in IFRS 13 differs from that proposed by International Valuation Standards (IVS), which are the generally accepted standards for professional appraisal practice in valuing real estate internationally. The fair value framework set out in IFRS 13 contains specific requirements relating to ‘highest and best use’, valuation premise, and principal market. This may require entities and their appraisers to re-evaluate their methods, processes and procedures for determining...
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...Asset Valuation Introduction As consultants for a new retail company, B.A.S.S. Customized Jewelers, our recommendations for reporting and valuing various assets of the business, as well as inventory policy, capitalization policy, and how these policies will help the company succeed are presented here. In this line of business, demonstrations of depreciation method recommendations are critical to show the inventory allocation and asset costs over the life of the inventory. Lastly, an examination of the policies and alternative valuation methods to justify the use of certain methods to use will be determined. This is the beginning process of meeting the future goals of the company and it is the desire of our committee and the company that as the C.E.O. you will find the recommendations viable. Inventory Policy Inventory management practices are varied; the accounting management is similar when it comes to inventory items. In the retail business, the shelves hold inventory until the product is purchased by the consumer. “The inventory account of a firm holds the cost of a product until the cost is released to the income statement to be subtracted from (matched with) the revenue from the sale. The cost of a purchased or manufactured product is recorded as an asset and carried in the asset account until the product is sold (or becomes worthless or is lost or stolen), at which point the cost becomes an expense to be reported in the income statement. The cost of an item purchased...
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...COMMERCIAL INVESTMENT PROPERTY: VA L U AT I O N METHODS An Information Paper ACKNOWLEDGEMNTS: The Publisher would like to express its thanks to Estates Gazette, the South Bank University and Jones Lang Wooten for permission to reproduce definitions taken from The Glossary of Property Terms (Estated Gazette, 1989). Please note: References to the masculine include, where appropriate, the feminine. Published by RICS Business Services Limited, a wholly owned subsidiary of The Royal Institution of Chartered Surveyors, under the RICS Books imprint Surveyor Court Westwood Business Park Coventry CV4 8JE UK No responsibility for loss occasioned to any person acting or refraining from action as a result of the material included in this publication can be accepted by the author or publisher. ISBN 0 85406 802 3 © RICS May 1997. Copyright in all or part of this publication rests with the RICS, and save by prior consent of the RICS, no part or parts shall be reproduced by any means electronic, mechanical, photocopying, recording or otherwise, now known or to be devised. Reprinted 2001 Printed by Quorn Litho Contents Information Papers Executive Summary Preface 1 1.1 1.2 1 .3 2 2.1 2.2 2.3 3 3.1 3.2 3.3 3.4 3.5 4 4.1 4.2 4.3 4.4 5 5.1 5.2 6 6.1 6.2 6.3 7 7.1 7.2 7.3 8 8.1 8.2 8.3 4 5 7 Valuation and Calculation of Worth A discussion of the role of the valuer and the distinction between valuation, appraisal and...
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...Property yields as tools for valuation and analysis Rosane Hungria-Garcia in collaboration with Hans Lind Björn Karlsson This report has been sponsored by the Real Estate Academy at the Division of Building and Real Estate Economics. Stockholm 2004 ______________________________________________________ Report No. 52 Building & Real Estate Economics Department of Infrastructure KTH Summary This project was started in order to get an overview of conceptual problems, measurement problems, theories of determinants of yields, the use of yields in different contexts and how the actors on the Swedish market looked upon yields. Important issues discussed in the report is the need for: - Conceptual clarity: A number of different yield terms exist on the market and it is very important to be clear about how the specific terms are defined. - Operational clarity: There are measurement problems both concerning rental incomes, operating and maintenance costs and property values. This means that reported yields can be “manipulated” by choosing suitable operationalisations and pushing estimations of uncertain factors in directions that are favourable to the actor in question. - Specify the purpose for which the yield should be used. The most important distinction is between using yields/income returns for valuation purposes and using yields as benchmarks or bubble indicators. In the first case various types of normalization of the net operating income can be rational. In the second...
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...strategies that advocate portfolio assembly over individual property selection may be defective. Each step of the appraisal process involves an unknown amount of estimation error. The combination of these errors is unlikely to produce a perfect, error-free estimate of value. Thus, appraisal error is virtually unavoidable. Investors need reasonable estimates of value when buying, selling, or retaining commercial property, so an unknown amount of appraisal error adds uncertainty to the decision-making process. Despite the uncertainty, investors have learned to make allowances for appraisal error in their decision-making processes. The way in which real estate investors interpret appraisal errors has a material effect upon the decisions that they make. In particular, the predominant belief among real estate professionals is that appraisal error is random. This belief materially influences investor attitudes toward portfolio management and the valuation process itself. Lack of understanding of the relative magnitudes of random and nonrandom components of total appraisal error has consequences for optimal portfolio strategies. For example, investors who deem the bulk of total appraisal error to be random may reasonably conclude that error in estimates is beyond their control or influence. To minimize total portfolio valuation error, such investors may assemble large, diverse portfolios even though the cost of owning an array of properties of various types and in various locations is expensive...
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...Introduction Basically, the study is on the differences of Generally Accepted Accounting Principles (GAAP) influence in property management industry. The study focuses on two basic accounting principles in valuing assets, which are fair value and historical cost. The property refers to the land and building, as those are the main part of total fixed assets of a company. Asset is the most important element in the balance sheet, hence the method used for assets valuation is very important to avoid over or under estimation. This is the reason why the choice for measurement method is importance in determining the value of assets because it will affects the acquisition price and the comprehensive income of the firm in terms off income and shareholder equity. The author too focuses on the accounting treatment in accordance to International Financial reporting Standard (IFRS), US GAAP and Greek GAAP. With reference to the article, asset can be defined as a good able to provide a constant flow of services such as housing services and a source of cash flow. Assets are ruled by a set of basic aspects such as the cost (cost of land or construction cost), the residual value, the useful life estimation and depreciation charge. These elements are correlated with the type and use form of assets. The author also apply some accounting principles in their study such as prudence, historical costs, substance over form, going concern, true and fair view and many more. Data Methodology/approach ...
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...CURRICULUM VITAE EZEANI CHINEDU FRANCIS Phone: 052 8312309 E-mail: nedu_ezeani@yahoo.com Contact Address: Nasser Humaid Abdulla Alshaiba, Al Nahda Building, No. 128, Flat 1605, Sharjah – U.A.E ESTATE MANAGEMENT OBJECTIVE To earn a respectable height in my chosen career through commitment, honesty and hard work leading to the attainment of organizational goals and professional excellence. PERSONAL PROFILE * Sex : Male * Date of Birth : 01-06-1984 * Relationship status : Single * Nationality : Nigerian * Passport no : A05869494 * Visa Status : Long Term Visit Visa * Language : English SPECIAL SKILLS AND CAPABILITIES * Computer literate. * Understands the principle of cost-effective. * Creative and motivational. * Ready to learnand adapt quickly. * Loyal, humble and dearly honest. SUMMARY OF QUALIFICTION * Bachelor of Science (Estate Management) 2008 – 2012 * Secondary School Certificate (NECO) 2004 * First School Leaving Certificate 1990 – 1995 * Diploma in Computer Application (Microsoft Office) WORKING EXPERIENCE New Dairy Farm Housing Estate, Pencinema, Agege, Lagos. 2012-2014 (The Manager, New Dairy Farm Housing Estate). * Handle of financial operations: upkeep of financial statements and cash book. * Keeping and updating records of service charges. * Inspection all facilities such as the central power generating system, water...
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...Revere Street Project Valuation October 11, 2013 Table of Content 1 Summary - Project Revere Street 3 2 The Residential Property Overview 3 2.1 Location 3 2.2 Economic Environment 4 3 Financial Valuation 4 3.1 Case Preview 4 3.2 Case Summary 5 3.3 Valuation Summary 6 4 Pro Forma - Revere Street 7 4.1 Balance Sheet (Estimated) 7 4.2 Income Statement (Estimated) 7 4.3 Statement of Cash Flow (Estimated) 8 5 Future Prospects and Concerns 8 1. Summary - Project Revere Street a. Estimated project Net Present Value -- $24,736 b. Estimated project Internal Rate of Return -- 19.10% c. Major concern -- Source of funds d. Suggested action toward project Revere Street -- GO 2. The Residential Property Overview 2.1 Location In the world of real estate, location sometimes determines the future of a property, residential or non-residential. Revere Street, a residential property located in the heart of downtown Boston, Massachusetts, provides a wonderful location for residents who also like to enjoy the convenience and diversity the city could offer. Revere Street shares Boston's unique New England historical city view and modernized financial district landscape. The pin point with the letter A on the map below shows a geographic center of Revere Street inside the City of Boston. Revere Street is located within less than one mile walk to the beautiful Charles River bank, the popular Newbury Street, the relaxing Boston Common...
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...Northampton Group Inc. – Case Study Analyses: How to increase shareholder value Nicole Arends, Jenny Feng, Laura Tromp & Zilha Wever FHTMS University of Aruba Mr. Don Taylor Corporate Finance FTS 2415 March 26, 2013 Introduction This Corporate Finance paper focuses on analyzing the challenges that Northampton Group Inc. (NGI) is facing as it tries to increase shareholder value. In the case study it is stated by the firm’s major shareholders, that they believe NGI is currently undervalued. In connection with this, the management of NGI is considering several means of increasing the shareholders value. Due to difficult economic conditions resulting from the Global Economic Crisis, there are both many opportunities as well as many risks to the alternatives that NGI’s management is considering. This paper will provide both the opportunity to use different valuation methods that will determine the value of the assets of NGI, as well as a discussion of different possible alternatives to increase shareholder value. Furthermore alternative solutions for NGI’s problem will be provided. NGI needs to elaborate by starting an active acquisition strategy or re-organizing its corporate structure with either an updated capital structure or converting to a real estate income trust. The last part of this paper will conclude with several remarks and recommendations for the Chief Financial Officer of Northampton Group Inc., Mr. Patel. These final analyses...
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...AMS ACCOUNTING LLP Project Report on Audit of Matty Kitchens vikas 8/1/2014 Table of Contents Analytical Review 3 • Comparison 3 Changes in Income statement 3 Changes in Balancesheet 5 • Ratio Analysis 7 Liquidity position 7 Profitability 8 Leverage 8 Asset Management 8 Audit Risk assessment and Audit Approach 9 • Going concern risk 9 • Revenue 10 • Expenses 11 • Inventory 11 • Account Receivables – valuation and existence 13 • Goodwill 13 • Account payables 14 • Capital Assets 15 Materiality 16 Evaluation of Internal Auditor work 17 Additional procedures performed at future inventory count 18 • Procedures performed during inventory count 19 • Procedures followed after inventory count 20 Audit program for Property Plant and Equipment 22 ROMM 22 Approaches to testing 22 Audit Test 23 Audit Documentation and Audit File 25 • Importance of audit documentation 25 • Parts of Audit file require Documentation 26 Auditor Report 28 Analytical Review Analytical review of Matty Kitchens is done using comparison and Ratio analysis. This analysis is based on extract of financial statement provided by Matty Kitchens. Matty Kitchens, a distributor of packaged meals and these meals are prepared by the matty kitchens itself. Company sell these products to grocery stores nationwide. Matty kitchens operates in a competitive environment. Because increased competition could affect the...
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...considering exchanging her shares in the commingled fund for the shares in the REIT. Real Estate Investment Trust (REITs) Real Estate Investment Trust (REITs) invests in and own properties by offering investors a highly liquid method of investing in high-density markets. Most REITs earn their revenue from property rent and leases. In order to boost real estate investments, REIT receives special tax consideration for investing in highly liquid market i.e. if more than 75% of their profits are generated through rents from real estate property and they distribute at least 90% of their current period profits as dividend to shareholders, then the trust will not be subjected to corporate tax. Advantages and Disadvantages of Public Real Estate The advantages of a REIT are as follows: a) Liquidity: Public REITs are more liquidate as compared to private REITs. Public REIT shareholders can easily exchange their shares in the stock exchange. b) Low sales commission: Brokers charge low sales commission on public REITs as compared to private REITs, which provides an opportunity for investors to retain high cash flows in order to invest in further shares. c) Information easily available: The information of public REIT is easily available as compared to private REIT; which will benefit the investors in its valuation and in future potential decisions. The disadvantages that need to be considered when investing in a REIT are: a) High agency...
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...Transaction Services • • TS Insights List bullet List bullet Sub bullet evaluation of the other two sources of taxable income ― Vol. 3 Heading 2 Financial reporting in an uncertain economy A closer look at income tax valuation allowances October 2009 Additional text goes here. Heading 3 Additional text goes here. Notwithstanding early signs that the global recession may be waning, the uncertain economic future continues to constrict corporate America. As companies continue to incur losses, focus has heightened on income tax valuation allowance assessments by companies and their auditors, as well as the Securities and Exchange Commission staff, through the issuance of comment letters. Specifically, much of this focus is on whether deferred tax assets reflected on corporate balance sheets will ultimately be realized. When a deferred tax asset is not fully realizable, a valuation allowance must be established against the deferred tax asset to reduce it to a net amount that is realizable. The related expense is generally reflected in the income statement as an income tax expense. A clear understanding of the judgmental nature of valuation allowance accounting models is critical in addressing this issue. The need for judgment The accounting requirements for deferred tax assets are set out in ASC 740, "Income Taxes," which establishes a "more likely than not" threshold for recognizing deferred tax assets. The interpretation of this criteria has historically...
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...Business KapStone Paper and Packaging Corporation was formed in Delaware as a special purpose acquisition corporation on April 15, 2005 to establish operating business in the paper, packaging, forest products and related industries. The Company operates in one segment, the integrated manufacture and sale of containerboard, corrugated products, and specialty paper for industrial and consumer markets. The Company has been actively and continued to be engaged in evaluating a number of potential acquisition opportunities, in an effort to diversify and/or grow the Company’s business. KapStone’s annual revenues exceed $2.3 billion as of fiscal year ended in 2014, which was comprised of $1.5 billion of containerboard and corrugated products and $0.8 million of specialty paper. KapStone’s business is affected by cyclical industry condition and general economic conditions in the U.S. and in the countries where the Company export their products. Export sales may also be affected by fluctuations in foreign exchange rates and trade policies and relations. Industry KapStone competes in the paper, packaging, forest products and related industries with concentrations in the containerboard, corrugated products, and specialty paper markets. Industry Risks * The paper, packaging, forest products and related industries are highly competitive and comprised of many participants. * The paper, packaging, forest products and related industries are highly cyclical. Fluctuations in the...
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...Business - Daniels and Radebouqh 2. International Business - Sundaram and Black 3. International Business — Roebuck and Simon 4. International Business – Charles Hill 5. International Business— Subba Rao 3.0.2 Strategic management 100 Marks Course Content 1. Strategic Management Process: Vision. Mission, Goal Philosophy. Policies of an Organization. 2. Strategy, Strategy as planned action, Its importance, Process and advantages of planning Strategic v/s Operational Planning. 3. Decision making and problem solving. Categories of problems, Problem solving skill, Group decision making. Phases indecision making, 4. Communication Commitment and performance, Role of the leader, Manager v/s Leaders Leadership styles 5. Conventional Strategic Management v[s Unconventional Strategic Management. The Differences, Changed Circumstance. 6. Growth Acce orators: Business Web, Market Power, learning based. 7. Management Control, Elements, Components of Management Information Sysstems 8. Mokena’s 7 8 Models : Strategy, style, structure, systems, staff, skill and Shared values 9. Group Project Reference Text 1. Strategic Management — Thompson & Striekland McGraw Hill 2. Competitive advantage – Michael...
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...services as authorized by state and/or local guidelines. The School District currently operates 3 instructional/support facilities staffed by 74 certificated employees and 41 non-certificated employees who provide services to 900 students and other community members. Note 2 – Nature of the Forecast This financial forecast presents, to the best of the Manchester Local School District Board of Education’s knowledge and belief, the expected revenues, expenditures and operating balance of the general fund. Accordingly, the forecast reflects the Board of Education’s judgment of the expected conditions and its expected course of action as of September 26, 2007, the date of this forecast. The assumptions disclosed herein are those that management believes are significant to the forecast. Differences between the forecasted and actual results will usually arise because events and circumstances frequently do not occur as expected, and those differences may be material. Note 3 – Nature of the Presentation The forecast presents the revenues, expenditures, and changes in fund balance of the...
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