Report Writing

Topics
 Report writing
 Terms of engagement
 Inspection
 Verification of information
 Minimum content of valuation report
 Assumptions
 Valuation approaches
Report Writing
 Quality
 Structure
 Style
 Email and Internet
Terms of engagement
 Order
 Identification of client
 Purpose
 Subject
 Interest to be valued
 The type of property
 Identification of property
 Documents
 Statement of the status of the valuer
 Appropriate currency to be adopted
 Assumptions, special assumptions
 Extension of investigation
 Basis on which the fee will be calculated
Inspections, Investigation, Physical verification
 Extent of work
 Problem / Potential problem - Impact on value should be considered
 Special assumption
 Restricted information
Inspections
 Characteristics of the property
 Surrounding area
 Construction of building, aprox. Age
 Dimensions and areas of L & B
 Description of accommodation , facilities etc.
 Uses of L & B
 Description of installations, amenities, services
 Plant and machinery installed in building valued
 Fixures, fittings , improvements
 Apparent state of repair and condition (good/bad)
 Environmental factors
Inspections .. contd
 Deleterious building materials
 Hazardous materials
 Appropriate physical restriction on further development
 Other info
 on leasehold property
 Care to value the interest
 No lease documents, proceed assumption
 Planning controls
 Limitations to verify information should be stated
Verification of information
 Declare the information and the source
 Information needs to be reliable
 IF accept the info which is not reliable then the assumption made
 If the assumption made for financial statement, prepare to discuss it with the
auditor.
 Express an opinion on legal issue
Minimum content of Valuation Report
 Identification of Client
 Purpose of Valuation
 Subject of valuation
 Interest to be valued
 Type of property, Use
 Basis / Base of valuation
 Date of valuation
 Status of valuer & disclosure of any previous involvement in any
respect
 The currency
 Assumptions / Spe. Assumptions /departures
 Extent of valuer’s investigation
Minimum content of Valuation Report .. contd
 Nature and Source of information
 Any consent to / restrictions on publication
 Limits/exclusions for liabilities to parties other than client
 Confirmation as per the std.
 Opinion of value in figure and words
 Signature and Date of report
Assumptions
 Title
 Condition of buildings
 Services
 Planning
 Contamination and hazardous substance
 Environmental matters
Signification assumptions
 Assumptions about state of asset mode of occupation have significant
impact on value
 There are two categories of assumptions
 Assumed facts consistent with those existing at the DOV (Date of valuation)
 That differ from those existing at the DOV

 Significant assumption – as per IVS / Extraordinary assumption – as per USPAP

 If assumption found to be false, it could alter valuer’s opinion directly related to

specific service
Special assumptions
 Special assumptions – as per IVS / Hypothetical condition – as per USPAP

 This assumption is contrary to what exists but is supposed for purpose of

analysis.
 Contrary to known facts about physical , legal, economic characteristics of
subject property OR about conditions external to property such as trends and
market conditions
Valuation approaches/Methods
 Direct Market comparison / Sales comparison
 Income approach – Rent capitalisation method
 - Discounted cash flow method
 Cost approach – Land and Building method

 Actual data inputs

 Prices achieved
 Actual income produced by the asset
 The actual cost of an asset

 Assumed inputs
 Estimated or projected cash flows
 Estimated cost of a hypothetical asset
 Market participants’ attitude
International financial reporting stds
 Fair Value
Fair value is the amount for which an asset could be exchanged, or a liability settled,
between knowledgeable, willing parties in an arm’s length transaction

[arm's length. adj. the description of an agreement made by two parties freely and independently
of each other, and without some special relationship, such as being a relative, having another deal
on the side or one party having complete control of the other.]
 CONTENT OF REPORT
 The valuer shall, in his report, state the following:-
• background information of the asset being valued;
• purpose of valuation and appointing authority;
• identity of the valuer and any other experts involved in the valuation;
• disclosure of valuer interest or conflict, if any;
• date of appointment, valuation date and date of report;
• inspections and/or investigations undertaken;
• nature and sources of the information used or relied upon;
• procedures adopted in carrying out the valuation and valuation standards followed;
• restrictions on use of the report, if any;
• major factors that were taken into account during the valuation;
• conclusion; and
• caveats, limitations and disclaimers to the extent they explain or elucidate the limitations faced by
• valuer, which shall not be for the purpose of limiting his responsibility for the valuation report.
Sample Questions
Sample Questions

1. Valuer should endeavour to ensure that he provides true and adequate information,
because

a)This is not required under any law

b)This makes a sensible valuation report

c)This misleads the client

d)This misleads public

 Ans: b)
 Sample Questions
2. While estimating the market value for mortgage, a valuer should consider himself

to be ..............

a) a lawyer

b) a mortgage

c) mortgagor

d) both mortgagor and mortgagee

 Ans d)
 Sample Questions
3. At the time of valuation, the valuer should have high degree of ................ with the

client and property to be valued.

a) Attachment

b) Detachment

c) Intimacy

d) None of the above

 Ans. b)
 Sample Questions
4. A written report casts high degree of ........ on the valuer as it acts as a formal record

and becomes a document/

a) Accountability

b) Duty

c) Integrity

d) Honesty

 Ans a)
 Sample Questions
5. News paper or media reports giving only information which may be without

expressing any opinion or advice which is left to the reader to make out. This is

a) Non-technical report

b) Technical reports

c) Legal reports

d) Project reports

 Ans : a
 Sample Questions
6. Valuation reports are to be prepared

a) At the time of receiving the relevant documents

b) After valuation is completed

c) Before undertaking valuation

d) During the inspection of the said property

 Ans : b)
 Sample Questions
7. A valuation report originates with the instruction given by the ............. in response

to which the task of writing a report is undertaken by a valuer.

a) Lawyer

b) Client

c) Concerned department

d) None of the above

 Ans : b)
 Sample Questions
8. Sale recorded at Registrar’s office is one of the sources from where ....................

a) Legal proof for market value of the property can be obtained

b) Sale instances of only leasehold properties can be collected

c) Cost of property can be collected

d) Price of only freehold properties can be collected

 Ans : a)
 Sample Question
9.Which of the following is not required to be mentioned in a leasehold valuation
report

a)Postal address of the property

b)Name of title holder

c)Name of the lessor

d)Name of the heir of the lessor

 Ans. d)
Thank You !