Mastering Investment Property Valuation: Essential Tips for Real Estate Investor

1. +91 9868455181 valuer.tka@gmail.com Home About Us Services3 Our Valuation3 Our Blog Contact Us Impairment Property Valuation Our Services IMPAIRMENT PROPERTY VALUATION Impairment valuation plays a significant role in financial reporting and decision-making, particularly concerning investment properties and the impairment of company assets. Under the accounting standard Ind AS 40, investment property valuation requires periodic assessment to determine if there is any impairment in the property’s value. Similarly, Ind AS 36 governs impairment assessment for other company assets, ensuring that their carrying value does not exceed their recoverable amount. Through these processes, impairment valuation helps identify potential declines in value, assess the financial health of assets, and make informed decisions regarding their management, potential write-downs, or disposal. It is a critical tool in maintaining accurate financial statements and aligning with accounting standards. Impairment valuation services typically involve two main phases in the process. These phases help ensure a thorough and accurate assessment of impaired assets or businesses. Here are two phases commonly associated with impairment valuation services:

2. 1. Assessment Phase: The assessment phase involves gathering relevant data and information about the asset or business being evaluated for impairment. This phase includes a comprehensive review of financial statements, historical performance, market conditions, industry trends, and any other factors that may impact the value of the asset. During this phase, impairment indicators are identified based on applicable accounting standards or guidelines. These indicators can include a significant decline in market value, adverse changes in the asset’s operating environment, or changes in legal or regulatory factors. The assessment phase also involves estimating the asset’s recoverable amount, which is the higher of its fair value less costs to sell, or its value in use. This estimation is typically done through cash flow projections, market comparisons, and other relevant valuation techniques. 2. Valuation and Reporting Phase: In the valuation and reporting phase, the estimated recoverable amount is compared to the asset’s carrying value to determine if impairment exists. If the carrying value exceeds the recoverable amount, an impairment loss is recognized. Valuation experts employ appropriate valuation methodologies, such as discounted cash flow analysis, market multiples, or other recognized approaches, to determine the fair value of the impaired asset. Once the impairment loss is determined, it is recorded in the financial statements and disclosed by the applicable accounting standards. A comprehensive impairment valuation report is prepared, documenting the methodologies used, assumptions made, and the resulting fair value determination. This phase may also involve additional considerations such as assessing the recoverability of related deferred tax assets or evaluating any potential reversals of previously recognized impairments. These two phases, assessment and valuation/reporting, form a comprehensive process for impairment valuation services. They ensure that impaired assets or businesses are accurately evaluated, allowing stakeholders to make informed decisions based on the fair value of their assets.

3. Impairment of Assets Impairment of Company Assets Impairment Assessment An impaired asset is an asset that has a market value less than the value listed on its owner’s balance sheet. According to U.S. accounting rules, the value of an asset is impaired when the sum of estimated future cash flows from that asset is less than its book value. An impairment cost must be included under expenses when the book value of an asset exceeds the recoverable amount. Impairment of assets is the diminishing in amount, or value of an asset. An asset is carried at more than its recoverable amount if its carrying amount exceeds the amount to be recovered through the use or sale of the asset. If this is the case, the asset is described as impaired and the Standard requires recognize an impairment loss. quality, strength the entity to Impairment valuation Ind AS 36 Ind AS 40 An impairment loss is an amount by which the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs of disposal and its value in use. The objective of this Standard is to prescribe the procedures that an entity applies to ensure that its assets are carried at no more than their recoverable amount. An asset is carried at more than its recoverable amount if its exceeds the amount to be recovered through the use or sale of the asset Permits interest held in an operating lease as investment property, if the definition of investment property is otherwise met and fair value model is applied. In such cases, the operating lease would be accounted as if it were a finance lease. treatment of property carrying amount

4. Investment Property Valuation Investment value is the amount of money an investor would pay for a property. It refers to an asset’s specific value based parameters. It is measurement of the asset’s property value. on individual’s certain an Our Advantages HOW WE WORKS SHARE YOUR REQUIREMENT COMPETENCE & LICENSING ENGAGE THE VALUER GET THE REPORT Here you may share specific You may confirm with the valuer After mutual satisfaction with work You may get the report agreed on requirements & expectation from about the credentials, experience, requirements and credibility, you the format as per the requirement of valuation services clearly stating capacity, ability, and adequacy to may authorize the valuer to do the specific law from the valuer either in the purpose of valuation, status of carry out the valuation as per your necessary activity as per the soft copy or a hard copy with due property and name of the intended requirements for the specific requirement of the assignment. signature & stamp after clearing the authority using the valuation report. purpose. dues of professional fees.

5. Here valuer may seek from you copies of certain documents. What People Say About Company    The valuation services provided by Thank you for the most I would like to thank you for Tanuj Kumar & Associates are very professional property valuation helping us in my residential prompt and genuine. I really service. Their valuation reports valuation quickly and easily. I appreciate their hard working and always helped – I will certainly would also like to let you know e?iciency in preparing the recommend to my friends and that you have an amazing website. Valuation Report in detail. family. I appreciate to valuer. MAHESH PATEL ASHWIN SOLANKI SONAL KHANNA

6. CONTACT US First Name Last Name Email Address Phone Number Message SEND MESSAGE About Company Our Services Contact Us A Unlocking the true value of your assets. We are your one-stop shop for all Lands +91 9868455181 property valuation needs. Professional, reliable, and experienced. A Registered Property Valuation A  valuer.tka@gmail.com Commercial Property A Mortgages          303 3rd Floor Bansal Tower Community Center-II, Ashok A Institutional Property Vihar-II, Delhi A Property Markets Copyright © 2023 Tanuj Kumar & Associates Terms & conditions Privacy Policy Desiged By : danstring.com