The investment value of a property as a proxy for value in use. Estimation of the investment value of the company Estimation of the value for investment purposes

To calculate the investment value can be used traditional methods, but they use non-market data. For example, an investor may apply a rate of return that is not a market rate and is specific to that investor.

When using the discounted cash flow method to determine the value, the appraiser comes to calculated value investment value, not market value. Thus, the investment value may be higher or lower than the market value depending on the requirements of the investor.

net present value(net present value, net present value, eng. Net present value, taken in international practice for the analysis of investment projects, the reduction - NPV or NPV) is the sum of the discounted values of the flow of payments, reduced to today.

The NPV indicator is the difference between all cash inflows and outflows, reduced to the current point in time (the moment of valuation investment project). It shows the value Money that an investor expects to receive from a project after the cash inflows have recouped its initial investment costs and the periodic cash outflows associated with the project. Because the cash payments evaluated in terms of their time value and risks, NPV can be interpreted as the value added by the project. It can also be interpreted as the total profit of the investor. Net present value NPV is calculated using the formula:

where is the discount rate

where is the payment in years () and the initial investment IC (Invested Capital) at the rate of

In a generalized version, investments should also be discounted, since in real projects they are not carried out at once (in the zero period), but are stretched over several periods. Calculation of NPV is a standard method for evaluating the effectiveness of an investment project and shows an estimate of the effect of an investment, reduced to the present moment of time, taking into account the different time value of money. If the NPV is greater than 0, then the investment is economically viable, and if the NPV is less than 0, then the investment is not economically viable (i.e., an alternative project whose return is taken as the discount rate requires less investment to generate a similar income stream).

NPV can also be used to evaluate the comparative efficiency of alternative investments (with the same initial investment, the project with the highest NPV is more profitable). But still for comparative analysis more applicable are relative performance. In relation to the analysis of investment projects, such an indicator is the internal rate of return.

In contrast to the present value indicator, the initial investment is taken into account when calculating the net present value. Therefore, the net present value formula differs from the present value formula by the amount of the initial investment.

At the stage of choosing a business project, it is important to correctly evaluate it. Do not forget that for different purposes there are several varieties of value.

Investment cost– this is not the market price to which we are accustomed. Its specificity lies in an individual approach to each unique investor with its unique set of tasks for using the evaluated investment object.

It cannot be calculated once and then placed in an ad or voiced to all buyers indiscriminately. Because for each of them the IP will be different - after all, they build their plans, invest a certain amount of resources, face certain levels of risks, and, accordingly, receive some profit.

Cost types

a transaction is envisaged for the alienation of the appraisal object, including when determining the redemption price, when the appraisal object is withdrawn in the absence of state regulated prices, or for state needs;
when determining the value of the placed shares of the company, acquired by the company by decision general meeting shareholders or by decision of the board of directors (supervisory board) of the company;
the object of assessment acts as an object of collateral, including in case of a mortgage;
when making non-monetary contributions to the authorized (share) capital, when determining the value of property received free of charge;
when determining the cost valuable papers which either do not circulate at the auctions of trade organizers on the securities market, or circulate at the auctions of trade organizers on the securities market for less than six months;
when deciding on the initial sale price of property in bankruptcy proceedings.

Investment value.

Investment value - the value of a property for a particular investor or class of investors for established investment purposes.

This subjective concept relates a specific property to a specific investor, a group of investors or an organization that has certain goals and / or criteria in relation to investment. The investment value of the valuation object may be higher or lower than the market value of this valuation object.

The investment value is determined in the following cases:

if it is supposed to make a transaction with the object of assessment in the presence of a single counterparty;
if the object of assessment is considered as a contribution to the investment project;
when substantiating or analyzing investment projects;
in the implementation of measures for the reorganization of the enterprise.

Liquidation value.

Liquidation value - the most probable price at which the object of appraisal can be alienated for a period insufficient to attract a sufficient number of potential buyers, or in conditions when the seller is forced to make a transaction for the alienation of property.

The liquidation value is determined when the property of a bankrupt enterprise is sold at an open auction, the property is seized as a result of a trial, or at customs. The liquidation value may be determined in addition to the market value when lending secured by property.

Recycling cost.

Utilization cost - the most probable price at which the object of assessment can be alienated as a set of elements and materials contained in it if it is impossible to continue its use without additional repair and improvement.

Utilization cost is determined at the end of the term beneficial use valuation object, or in the presence of significant damage, if the further use of the valuation object for its intended purpose is impossible.

replacement cost.

Replacement cost - (cost of reproduction and replacement) - the amount of costs in market prices that exist on the date of the assessment, to create an object identical to the object of assessment, using identical materials and technologies, or to create an object similar to the object of assessment, using existing the date of the evaluation of materials and technologies.

The replacement cost is determined by:

when calculating the tax base for income tax, property tax;
for purposes tax accounting when making a fixed asset as a contribution to the authorized capital;
when revaluing fixed assets for the purposes accounting;
within cost approach when evaluating property.

The replacement cost can be determined when insuring property.

Special cost.

Special value - value additional to the market value that may arise due to physical, functional or economic connection object of property with some other object of property.

A special value is an additional cost that may exist more for a buyer with a special interest than for the market as a whole.

In particular, a special cost can be calculated in order to determine the synergistic effect in the reorganization of the enterprise.

Source: "rrg.ru"

Investment value is the future returns for each individual investor

The phenomenon of investing money in something for the purpose of generating income as such appeared in the economy of our country relatively recently. With the planned type of economy, which was under the Soviet Union, there was no investment as such. Private property was not welcomed, and the state allocated subsidies to nationalized enterprises.

Therefore, investment as a kind financial activities came to us with the restructuring of the economy under the Western capitalist mode. In such an economy, investing your savings in some object for the purpose of making a profit is a good way to earn money.

What is investment value? This term should be distinguished from market price because they are completely different concepts.

The market value of any object is the price for which it can be sold, exchanged, bought. That is, this is his actual assessment.
Investment value is something else entirely. This term reflects future returns for each specific investor. In this case, the future benefit is given to the present.

Also, for each individual financial entity, the level of risks will be different. Accordingly, the profit from the investment object will also be different.

This type of value may go against the market. This happens for the following reason: the estimated income from the object may be higher than the market price of the enterprise or lower. It is a subjective measure of the value of an asset. It reflects the intentions of the depositor, which are not related to the purchase and sale and any commercial activities regarding the object.

Grade

If we evaluate the investment price of an enterprise, then this factor can give a voluminous and sufficient useful information about development and prospects this production. It can show how attractive it is for investments, as well as help in developing a financing plan.

The following factors are used to estimate the cost:

Tax status, and, accordingly, the amount of taxes paid by the enterprise;
The degree of development of the forecast;
Quantity and total amount material costs;
Estimating the value of future material income and flows;
rate of return;
Determining the number and degree of risks specific to a given project on deposits.

If, as a result of the assessment, it turned out that the investment price is much higher than the market price, then this means that the enterprise is extremely attractive for future investors. If the reverse situation is observed, then the attractiveness for investors is small. And this means that it will be more difficult to find people who would make an investment of money.

The main task for a specialist involved in attracting investors to the development of an enterprise is to increase the investment value by all available means. It will attract a large number of contributions, which will allow even more intensive development of the enterprise.

This task is carried out by studying the policy of contributions and ensures the competitiveness of production or firms. This factor is very important in assessing the rationality of investments. It is he who will show the future investor whether it is necessary to invest in this project or is it another "dummy".

Source: "kudainvestiruem.ru"

IP versus the market

When contacting an appraiser, the customer, as a rule, asks to evaluate the market value of the land or property. In the subsequent discussion, it often turns out that the customer does not need an assessment of the market value, but of the investment value. Often this happens due to the fact that the customer (the user of the appraiser's services) simply did not know about the existence of other costs and therefore could not formulate the order correctly.

For example, it is not uncommon for two parties, a buyer and a seller, to have already agreed to a real estate transaction as part of a more complex contract involving the sale of part of the business. The buyer, to whom the contract price of the object seemed too high, asks the appraiser to estimate the market value of the object.

When drawing up a contract, a qualified appraiser must clarify the purpose of the valuation and indicate to the customer that the terms of the transaction do not meet the standard for determining market value, since the buyer and seller in this transaction have already been identified and are bound by other mutual obligations.

If these external circumstances are not typical for the market, the appraiser should offer the customer to consider the investment value of the object, which in this case is more consistent with the essence of the transaction.

If the customer does not plan to immediately list the object for free sale and his understanding of the value is not the same as that of typical market participants, then the market value is probably not the type of value that the client wants.
Note that Russian standards define several cases of mandatory application of market value. One of them is “determining the value of the collateral object, including in case of a mortgage”.

This requirement is consistent with the definition of market value, since the lender, and not the borrower, will demand that the object be put up for free sale in the event of a loan default.

The investment value according to Russian standards is defined as the value of the object “for a specific person or group of persons with the investment purposes of using the appraisal object established by this person (persons). When determining investment value, in contrast to determining market value, taking into account the possibility of alienation at investment value on open market not required".

International valuation standards give a more concise description: "Investment value is the value of an object for a specific investor, or class of investors, for specific investment purposes." The investment value depends entirely on the specific goals of the investor and may be more or less than the market value.

The assessment of the investment value of the object will be higher than the market value if this investor has at least one of the following advantages over other market participants:

special opportunities for financing the project (a loan at preferential interest, the participation of the seller in an investment project, or access to a source of financing that is not available to other market participants).
the investor's ability to change as needed legal status object (for example, organize a change in the category of acquired land from agricultural to settlement land, remove the status of a historical monument from the object, change special purpose, organize the adjustment of urban planning regulations, etc.).
agglomeration effects (for example, the case when an object can be converted into a profitable one only by merging it with a neighboring object. In this case, for an investor - the owner of a neighboring object, the investment value of the object significantly exceeds the market value).
possession of information regarding the object or its environment, inaccessible to others (possessing such exclusive information, Ostap Bender offered for chairs at an auction a price higher than the market price).

Our practice shows that most often it is more important for Russian investors to know the investment, rather than the market value of real estate in the following cases:

Acquisition of a property for investment purposes;
Planned investment project at different stages of its implementation;
With a joint equity investment or financial responsibility;
When the purchase or sale of real estate is part of a larger big deal with business.

Explanations for each of the above points show the benefit of investment value analysis.

Acquisition of a property for investment purposes.

If a piece of land or a real estate object is acquired for the purpose of designing and building a new profitable property, then before acquiring the object, the investor needs to assess its compliance with investment goals.

If the buyer's investment parameters are less stringent than the market average, then the investment value estimate will be higher than the market value. The buyer usually does not disclose his objectives and starts by offering a price below market value. The investment value is the upper limit of the price that the average buyer can afford.

Planned investment project at different stages of its implementation.

Such an assessment is necessary for the investor, for his partners and creditors, and for potential buyers when creating a new project. A well-planned and properly implemented investment project will have an investment value, usually higher than the market value, even after construction is completed.

During the implementation of the project, an experienced developer eliminates uncertainties, overcomes administrative barriers, solves technical problems, which reduces the risks for subsequent buyers.

Accordingly, the market value of the object is growing, and with it the investment value, therefore, when organizing equity or debt financing, regular reassessment of the market and investment value of the object during the project implementation is required.

In the case when there is a purchase or sale of real estate “in conjunction” with other business conditions, it is important for the buyer (and sometimes also the seller) to know the investment (for this case) and the market value of the object.

The "linked terms" may be attractive to the buyer, and the investment value of the property may be higher than the market value for him, but the value of any "premium to the seller" should be compared with the buyer's benefit from other "linked" terms.

Investment activities V modern conditions rapidly changing world is so important that two commissions on International Standards Financial Statements have recently been advised to account for investment projects under construction at their fair value.

Appraisers performing asset valuation for IFRS reporting purposes will be required to pay Special attention the guidance contained in this document - and to distinguish the basic elements of market value from those of investment value, which are more typical in sales transactions.

Source: "cre.ru"

Investment appraisal

Unlike market value real estate or land plots, the purpose of which is to determine the market value of the property being valued, the investment value can be defined as the amount that an investor would pay for a given property given the investment objectives of this investor, including target profitability, tax status, etc.

The decision on whether or not to invest in a business project is made by investors based on an investment assessment.

In order to obtain all the information necessary to make an informed decision on the feasibility of investing in a particular business, it is required to conduct complex analysis project and determine its investment value.

When determining the investment value, the property valuation report analyzes the conditions of sale (investment) and their difference from the typical conditions for the sale of such property on the market, the impact of the noted conditions on the formation of its value, including based on the principle of the most efficient use.

Information sources that make it possible to take into account the noted conditions can be a business plan, design estimates and documents that confirm the performance of certain works, the results of an analysis of the impact of additional investment conditions in the process of selling the appraised object, etc.

According to the National Assessment Standards:

investment value is the value determined taking into account the specific conditions, requirements and purpose of investing in the appraisal object.
investment capital this is the sum of own and borrowed capital (long-term debt) of an integral property complex.
capital investments - investments that are directed to the construction, manufacture, reconstruction, modernization, acquisition, creation of non-current assets (including non-current tangible assets intended to replace existing ones and equipment for installation), as well as advance payments to finance capital construction.

The investment value of the appraised object is used to take into account the terms of the contract, in connection with the conclusion of which the appraisal is being carried out, in terms of the need for additional investment or the fulfillment of other requirements that require additional material costs.

Procedure

The investment value of the valuation object in the form of an integral property complex of financial interests is determined mainly using the income approach using the discounted cash flow method, and the valuation object in material form - by combining several methodological approaches.

According to p.p. 20-21 National Standard N 3 capital investment forecasting, increase (decrease) in working capital and amounts long-term obligations is carried out on the basis of and in conjunction with the forecast indicators of the enterprise's activities Property Complex which is being evaluated.

When forecasting, it is necessary to take into account only those investments, increases (decreases) in working capital and amounts of long-term liabilities, the feasibility of which is economically justified, and the corresponding expenses are provided by predictable internal or external sources of financing (the possibility of borrowing the necessary funds).

In the event that the assumption of the possibility of starting or continuing the implementation of the forecast economic activity enterprises, without initial capital investment or investment in working capital incorrect, such investments are taken into account during the calculations:

without discounting, if the expected timing of their introduction is close to the valuation date and can reasonably be identified with it;
as part of the forecasted cash flows for the respective quarters or months that are subject to discounting. At the same time, the forecasting and discounting of cash flows within the forecast period are carried out by quarters or months.

Based on the results of the work performed, an investment appraisal report (investment appraisal) is issued, which has full legal force for the participants in the transaction and users of the investment appraisal report (investment appraisal).

Source: "rentagroup.com.ua"

Investment value assessment

Investment value is the fair value of a business to a particular or prospective owner. This indicator takes into account the increase in profits from the use of the know-how of the company, plans for its reorganization, and the like.

Investment value reflects how much an asset or the firm as a whole costs a particular owner or may cost the owner in the future. This type of value represents the knowledge, capabilities, expectations of the current or future owner regarding risks, the most likely return, and many other factors.

The expediency of assessing the investment value is associated with the adoption of an investment decision, that is, a comparison of the market value of the property being valued and its investment value.

Market value and investment value are inherently different, but may be the same under certain circumstances.

Independent evaluation market value usually occurs without reference to the value of the investment value, but the assessment of the investment value is almost always accompanied by an assessment of the market value in order to ensure the ability to make the right investment decision.

Market valuation does not take into account the existence of any specific sellers or buyers in the market, the appraiser proceeds from the most typical prospective transaction between the seller and the buyer, who have the qualities and motivation that are typical for the market of the objects being valued.

IN this case It is very important to be able to distinguish between typical market conditions and the individual specific requirements of a particular investor, such as synergies from combining with other ongoing operations and differences in the following components:

valuation of future cash flows;
determination of the degree of risk and its factors;
required rate of return;
degree of predictability;
the level of financial costs;
tax status.

Thus, if the result of the investment value appraisal exceeds the market value of the appraised object, then the investment attractiveness of the asset in question is high. And vice versa, if the investment value of the business being valued lies below the market value, then the potential investor is likely to refuse to finance this investment project.

That is, the main task facing a specialist who evaluates the market value of a business is to implement investment policy aimed at continuous growth of investment value in order to ensure competitive advantages.

As a rule, the purpose of the valuation is to determine the value that the client needs to make a management decision.

Various parties may be interested in carrying out appraisal work: from state structures before individuals; control and audit bodies, management structures, banks, Insurance companies and other organizations.

Factors of investment value determine the methods of its assessment, and the main criterion for determining the method is the ability to assess the investment value of the enterprise, taking into account the most important risks.

The income approach takes into account these factors to the greatest extent and is suitable for assessing investment value. The usefulness of an organization to an investor or manager is determined by the potential return on invested capital, and this understanding of the market value of the business reflects the investment value.

Source: ocenka-stoimosti.ru"

In real guidelines the experience of conducting appraisal work in accordance with the Federal Law No. 135 “On appraisal activities in the Russian Federation”, as well as the Federal Appraisal Standards FSO 1, FSO 2, FSO 3, which are mandatory for use by subjects of appraisal activity, was taken into account.

This methodology is intended to determine the investment value of land plots for participants in land relations.

Basic concepts

Land plot - a part of the earth's surface (including the soil layer), the boundaries of which are described and certified in the prescribed manner.

Land may be divisible or indivisible. Divisible is a land plot that can be divided into parts, each of which, after the division, forms an independent land plot, the permitted use of which can be carried out without transferring it to another category of land, except for cases established by federal laws.

Improvements land plot- buildings, structures, structures, engineering infrastructure facilities located within the land plot, as well as the results of work and other impacts (changes in relief, fertilization, etc.) that change the qualitative characteristics of the land plot.

The market value of the valuation object is the most probable price at which the valuation object can be alienated on the open market in a competitive environment, when the parties to the transaction act reasonably, having all necessary information and the value of the transaction price does not reflect any extraordinary circumstances.

The investment value of the appraisal object is the cost of a land plot for a specific investor.

Unlike market value, which assumes a “typical” buyer or a “typical” investor, investment value is determined by the needs and characteristics of the individual.

Investment value is related to the present value of future income generated from the use of the property. For the investor, such factors as risk, the scale and cost of financing, future increase or decrease in the cost of objects, changes in tax legislation.

Appraisal method - a method for calculating the value of an appraisal object within the framework of one of the approaches to appraisal.

The date of the appraisal is the calendar date as of which the value of the appraisal object is determined.

Price - sum of money, offered or paid for the object of assessment or its equivalent.

An analogue of the appraised object is another object similar in terms of basic economic, material, technical and other characteristics to the appraised object, the price of which is known from a transaction that took place under similar conditions.

The final value of the value of the appraised object is the value of the value of the appraised object, obtained as a result of the generalization of the results of calculations of the value of the appraised object, justified by the appraiser, using various approaches to appraisal and appraisal methods.

The risk-free rate of return is the rate of return on investment when investing money in the most reliable assets.

Discounting is the process of determining the present value of future income and expenses. Land rent - the income brought by the land plot.

Cost factor - a factor, the change of which affects the market value of the land.

Valuation principles

Determining the market value of a land plot is based on the following principles:

The principle of utility - land plots that are able to satisfy the needs of the user (potential user) for a certain time have a market value.
The principle of supply and demand - the market value of a land plot is formed as a result of the interaction of supply and demand in the market and the nature of competition between sellers and buyers.

Demand is usually characterized by the number of objects that buyers are ready or able to buy during a certain period of time at the prevailing market value at a given time. The offer is characterized by the number of objects offered for sale on the market at the moment at a specific price.

The ratio of supply and demand determines the price level in an equilibrium market.

There are three possible states of the relationship between supply and demand:

supply and demand are equal, as a result of market transactions, an equilibrium fair market price of real estate objects is formed;
demand exceeds supply, prices in the market rise, speculative prices are formed, there is a danger of protectionism and corruption, leading to the destruction of the market;
supply exceeds demand, prices fall, market stagnation occurs.

In countries with equilibrium market economy these states periodically replace each other depending on factors related to both general condition economy, as well as with social, demographic and other processes.

In non-equilibrium conditions transition economy characteristic of Russia, this principle often does not have a significant impact, since supply and demand are largely regulated administratively, often due to a significant underestimation of the supply price of land plots.

The principle of substitution - the market value of a land plot cannot exceed the most probable cost of acquiring an object of equivalent utility.

This principle assumes that there are options for the buyer, i.e. the value of a real estate object (land plot) depends on whether there are similar objects on the market or objects that replace this one.

The principle shows that the value this object should not exceed the cost of acquiring a similar object (land plot) on the market.

Therefore, the value of a particular land plot is determined by the lowest price at which it is possible to purchase a similar land plot that has the same basic indicators, including potential utility and profitability.

In Moscow, especially in the central part of the city, as in most other cities with a historically developed architectural appearance, it is almost impossible to find exactly the same vacant land plots. The uniqueness of each site creates certain difficulties for sale on the land market, subsequent development, but contributes to the formation of a fairly high level of market prices.

The market situation looks different in new cities, districts of the new mass building, where the level of standardization of architectural urban planning solutions and therefore more of the same type of land. Here the principle of substitution manifests itself in full, contributing to the stabilization of market prices at a relatively low level.

The principle of expectation - the value of the market value of a land plot depends on the expected value, term and probability of receiving rent from it.

The value of the market value of the land plot depends on the income remaining after payment for the factors of production attracted to the land plot for entrepreneurial activity.

This principle shows that the value of a real estate object - the current value of all future income received from its use (including the sale and value of real estate objects, primarily land plots) - is constantly growing due to an increase in demand and limited supply.

However, this principle does not mean that the owner of real estate (land) literally has to wait for an increase in the price of real estate or profitability from renting it out. It only reflects the fact that the use of real estate, land, is fundamentally long-term.

Therefore, when evaluating a property, it should be remembered that its value is far from always equal to that average price, which has developed in the market for similar objects by the time of assessment. The present value of the entire amount of income may be significantly higher.

The principle of external influence - the market value of a land plot depends on the influence external factors.

The principle of conformity - the property being valued (a piece of land) has the highest value, provided that it is somewhat similar to the surrounding properties in terms of use, size and style, with minimal development costs.

In other words, if all the economic factors that determine the maximum utility and profitability of a given site are balanced in the best possible way.

Thus, for a given land plot and a real estate object located or created on it, the conditions for matching the costs of its acquisition and development and the cost or profitability of the real estate object created on it must be achieved.

One of the criteria for verifying the compliance of the land plot valuation with this principle is the share of the value of the land plot itself in the total value of the property located on it.

In the central part of Moscow, this ratio approaches the indicators typical for other large cities of the world.

Therefore, the potential for further growth in prices for land plots in the city center is relatively small (excluding land plots intended for the construction of high-rise buildings), and can be mainly due to further growth in construction costs and real estate prices with an improvement in its consumer qualities.

The implementation of this principle makes it possible to separate the cost of the actual land plot from the total value of the property.

The principle of the most efficient use - the market value of a land plot is determined based on its most efficient use.

The most efficient use of a land plot is the most probable use of a land plot that is physically possible, reasonably justified, compliant with legal requirements, financially feasible and as a result of which the value of the land plot will be maximum.

The most efficient use of a land plot is determined taking into account its possible reasonable division into separate parts that differ in forms, type and nature of use. The most efficient use may not be the current use of the land.

When determining the most efficient use, the following are taken into account:

intended purpose and permitted use;
prevailing land use methods in the immediate vicinity of the assessed land plot;
expected changes in the land market;
existing use of the land.

When evaluating a land plot, out of all possible (allowed) options for its use, the best and most profitable is selected, and it is it that is used for evaluation.

In this case, as mentioned earlier, only those use cases are taken into account that:

firstly, they comply with legal norms (including urban planning restrictions, requirements for the protection environment, monuments of history, architecture, improvement of the adjacent territory),
the implementation of which, secondly, is physically possible,
which, thirdly, generate income (if we are talking about commercial valuation).

As a result, the use case is selected, in which the maximum price can be obtained, taking into account all legal, urban planning, environmental and other restrictions.

If the site is free from buildings, then it is determined which object can be built based on the option of the most efficient use of the site, taking into account all existing restrictions.

If there is a building on the site, then an analysis is carried out whether to increase the cost of the site by the value of the value of this building or reduce it by the value of the cost of demolition of this building with the chosen option for the best use of this land plot, of course, taking into account the existing restrictions.

This principle is most applicable to the evaluation of vacant land plots. To assess built-up land plots, its application is much more complicated, since it allows you to separate the cost of the land plot itself from the value of the entire real estate complex.

A building or structure located on a land plot does not always have the highest value or brings the highest income.

In addition, over time, as a result of natural wear and tear of the building, changes in market conditions and other factors, the value of the property as a whole can significantly decrease, while the market value of the land plot may remain unchanged and even increase.

Thus, the principle of the best and most efficient use makes it possible to estimate the maximum possible amount of land rent from a given land plot, regardless of whether the plot is built up or not and what building or structure is located on it at the time of assessment.

It should also be noted that this principle is important in assessing not only individual land plots, but also large urban areas.

Its use makes it possible to optimize the land and urban planning policy of the city on the basis of strict economic calculations. First of all, this concerns improvements to urban lands owned by the city, i.e. its land ownership.

The value of the market value of a land plot changes over time and is determined on a specific date (the date of the valuation).

Determining the best and most efficient use case

The market value of land depends not only on the current use case, but also on the available alternative uses. This principle makes it possible to evaluate maximum income from the land plot and determine its highest value, regardless of whether the plot is built on or not, and what buildings are located on the date of valuation.

The analysis of the best and most efficient use case is carried out in two stages:

The best and most efficient use of both free land. If the site is not developed, then it is determined what type of improvements, taking into account the legal, physical constraints and prospects for the development of the area, is most effective to build.
The best and most efficient use of the land with existing improvements. If the site is built up, then, as practice shows, its current use does not always correspond to the best and most efficient.

This situation will continue until the value of the land exceeds the total cost of a single object in its current use, taking into account the costs of demolition of the structure.

The sequence of analysis of the best and most efficient use of land:

Comparison of alternative options for building a land plot.
The selection of options is based on:
- Supply and demand analysis.
  This allows you to determine the target market, that is, to identify potential buyers and tenants.
  1. At the same time, the dynamics, composition and migration of the population are considered.
  2. Trends in changing preferences and tastes are taken into account.
  3. The advantages of a land plot are determined in comparison with land plots available on the market.
- Location potential analysis considering the following factors:
  1. Type of property being valued;
  2. Prospects for the development of the area;
  3. Features of the territorial-economic zone in which the land plot is located;
  4. Proximity and accessibility of facilities necessary for the efficient operation of real estate;
  5. Transport accessibility land plot;
  6. inconvenience and risk.
- Study of legal rights to development.
  1. Exploring Physical Limits:
  2. The area and size of the plot;
  3. Engineering and geological conditions for construction;
  4. Availability of engineering infrastructure and the level of services provided.
Determination of the cost of the land plot for each development option.
Determining the financial feasibility of the identified development options.

Example. According to the zoning data, the land plot is suitable for the construction of warehouse, office or commercial buildings. The area of the building is 3,000 sq.m. Capitalization ratio 20%. Determine the investment value of the land, taking into account the best and most efficient use.

Conclusion: Thus, the best and most efficient use of the land is construction office building. The investment value of the land plot, taking into account the best and most efficient use, is $787,500.

Determining a variant with available improvements

In determining the best and most efficient use of various options use of the improved land are compared according to the rate of return on capital.

If these options do not involve capital expenditures for reconstruction or modernization, then net operating income can be compared.

A typical use case for an improved land plot is:

Reconstruction or renewal of improvements located on the land. If the condition of the building frame and foundation allows reconstruction or repair on their basis, then two options are studied:
- bringing the premises to an average level of quality with the help of cosmetic repairs;
- carrying out reconstruction and bringing the object to European standards.
Demolition of land improvements. Existing improvements may be refurbished as long as they contribute to the overall value of the single property. Existing improvements are demolished when none exist effective projects for their repair, reconstruction and further use.
Continued use of improvements in the current state. If option #1 and option #2 are not effective, then existing improvements can be used without modification.

Methods of determination

To determine the investment value of a land plot, the same methods are used as for determining the market value of a land plot. Additional methods include the following method: Assessment of urban land under the terms of standard investment contracts.

This method arose in connection with the provision of land plots on the terms of the subsequent division of an object built at the expense of the investor between the city, the owner of the land and the investor. The City provides a site for the construction of improvements at a fraction of the cost of the improvements.

The share of Moscow is from 30% to 50% of the area of the constructed facility. Thus, payment for the right to long-term lease of a land plot is carried out in natural form.

The evaluation procedure under this method:

The characteristics of the building planned for the construction of an object on this site are determined on the basis of urban planning documentation.
The size of the areas of various functional purpose transferred to the city under the terms of this investment contract.
The cost of 1 sq.m. is determined. areas of various functional purposes.
Determined total cost squares passing the city.
The term for the implementation of the investment project is determined.
The period of time required for the sale of the areas transferred to the city under the terms of the investment contract is determined.
The discount rate is calculated.
The current value is calculated.

The resulting value is the investment value of the land used in this investment project.

The appraisal of a land plot must not contradict the basic principles of appraisal of the market value indicated above.

In the event that in the normative legal act containing the requirement mandatory appraisal of a land plot, or the agreement on the appraisal of a land plot (hereinafter referred to as the agreement) does not specify a specific type of value of the appraisal object, the market value of this object is subject to establishment.

Evaluation of land plots is obligatory in case of involvement in the transaction of land plots owned in whole or in part by the Russian Federation, constituent entities of the Russian Federation, or municipalities, including:

when determining the cost of land plots owned by the Russian Federation, subjects of the Russian Federation or municipalities, for the purpose of their privatization, transfer to trust management or lease;
when using land plots belonging to the Russian Federation, constituent entities of the Russian Federation or municipalities, as a subject of pledge;
when selling or otherwise alienating land plots belonging to the Russian Federation, constituent entities of the Russian Federation or municipalities;
upon assignment of debt obligations related to land plots owned by the Russian Federation, constituent entities of the Russian Federation or municipalities;
when transferring land plots owned by the Russian Federation, constituent entities of the Russian Federation or municipalities, as a contribution to the authorized capital, funds of legal entities, as well as in the event of a dispute over the cost of a land plot, including:
- during the nationalization of land plots;
- in mortgage lending to individuals and legal entities in cases of disputes over the value of the land plot;
- when drawing up marriage contracts and dividing the property of divorcing spouses at the request of one of the parties or both parties in the event of a dispute over the value of this property;
- in case of redemption or other withdrawal of land plots from owners provided for by the legislation of the Russian Federation for state or municipal needs;
- when assessing the value of land plots in order to control the correctness of paying taxes (property tax) in the event of a dispute on the calculation of the taxable base.

These requirements do not apply to relations arising from the disposal of state and municipal unitary enterprises and institutions with property assigned to them on the basis of the right of economic management or operational management, except for cases when the disposal of property in accordance with the legislation of the Russian Federation is allowed with the consent of the owner of this property.

The basis for carrying out work on the assessment of the value of a land plot is an agreement between the appraiser and the customer.

In the cases provided for by the legislation of the Russian Federation, the appraisal of the value of a land plot, including a repeated one, may be carried out by an appraiser on the basis of a ruling by a court, an arbitration court, an arbitration court, as well as by decision authorized body.

Court, arbitration court, the arbitration court are independent in choosing an appraiser.

The costs associated with the appraisal of the object of appraisal, as well as monetary remuneration to the appraiser, are subject to reimbursement (payment) in the manner prescribed by the legislation of the Russian Federation.

The contract between the appraiser and the customer is concluded in writing and does not require notarization. The contract must contain:

grounds for concluding a contract;
type of object of assessment;
type of determined value (values) of the appraisal object;
monetary reward for the assessment of the object of assessment;
information about insurance civil liability appraiser.

In an agreement in without fail information is included on whether the appraiser has a license to carry out valuation activities, indicating the serial number and date of issue of this license, the body that issued it, and the period for which this license was issued.

The valuation agreement must contain an exact indication of the land plot and its description.

With regard to the appraisal of land plots owned by the Russian Federation, constituent entities of the Russian Federation or municipalities, an agreement is concluded by an appraiser with a person authorized by the owner to conclude a transaction with the objects of appraisal, unless otherwise provided by the legislation of the Russian Federation.

When assessing, the appraiser is obliged to use information that ensures the reliability of the appraisal report as a document containing information of probative value. The amount of information used in the assessment, the choice of sources of information and the procedure for using the information are determined by the appraiser.

When assessing the market value of a land plot, its intended purpose and permitted use, the rights of other persons to the land plot must be taken into account. The market value of a land plot changes with a change in any of its listed legal characteristics.

The results of the assessment must be presented in the form of a written assessment report.

The evaluation report must not be ambiguous or misleading. The appraisal report should be written in a generally accessible language, with explanations of special terms, contain detailed justifications and necessary explanations of the appraiser's assumptions, calculations and conclusions.

If during the evaluation of a land plot, not the market value is determined, but other types of value, the report must indicate the criteria and reasons for deviation from the possibility of determining the market value of the object of evaluation.

The report must include:

date of compilation and serial number of the report;
the basis for the appraiser to evaluate the object of appraisal;
legal address appraiser and information about the license issued to him to carry out appraisal activities for this type of property;
an accurate description of the appraisal object, and in relation to the appraisal object owned by a legal entity - details legal entity And book value this object of assessment;
valuation standards for determining the appropriate type of value of the valuation object, the rationale for their use in the valuation of this valuation object, the list of data used in the valuation of the valuation object, indicating the sources of their receipt, as well as the assumptions made during the valuation of the valuation object;
the sequence of determining the value of the object of assessment and its final value, as well as the limitations and limits of the application of the result obtained;
date of determination of the value of the appraisal object;
a list of documents used by the appraiser and establishing the quantitative and qualitative characteristics of the appraisal object.

The report on the valuation of the land plot must, in addition to the mandatory data, include:

description of the land plot and its improvements, including the intended purpose and permitted use of the land plot, encumbrances with the rights of third parties;
photographs of the land and its improvements;
characterization of the state of the land and real estate market;
identification of the most efficient use of land.

The appraisal report may contain annexes, the composition of which is determined by the appraiser, taking into account the requirements stipulated by the terms of the appraisal agreement.

All materials of the appraisal report should be aimed at substantiating the type of value of the land plot being determined. Materials and information not related to the costing procedure should be avoided in the valuation report.

The final value of the value of the land plot must be expressed in rubles as a single value, unless otherwise provided in the valuation agreement.

The contract may provide that the final value of the land plot is determined as a range of values.

The final value of the value of the appraisal object, indicated in the appraisal report, drawn up in the manner and on the basis of the requirements established federal law"On valuation activities in the Russian Federation", valuation standards and regulations on the valuation activities of the authorized body for monitoring the implementation of valuation activities in the Russian Federation, may be recognized as recommended for the purposes of making a transaction with the subject of appraisal, if no more than 6 months.

If there is a dispute about the reliability of the value of the market or other value of the land plot established in the report, including in connection with the existing other report on the assessment of the same land plot, the said dispute is subject to consideration by a court, arbitration court in accordance with the established jurisdiction, arbitration court by agreement of the parties to the dispute or contract, or in the manner prescribed by the legislation of the Russian Federation governing valuation activities.

The court, the arbitration court, the arbitral tribunal have the right to oblige the parties to conclude a transaction at a price determined in the course of consideration of the dispute in a court session, only in cases where the transaction is mandatory in accordance with the legislation of the Russian Federation.

Investment price- this is the price of property for a particular investor, taking into account certain goals and conditions (criteria) of investment. This type of price may go against the market. This happens for the following reason: the estimated income from the object may be higher than the market price of the enterprise or lower. It is a subjective measure of the value of an asset. It reflects the intentions of the investor, which are not related to the sale and purchase and any commercial activity regarding the object.

The following factors are used to estimate the price:

tax status, and, accordingly, the amount of taxes paid by the enterprise;
degree of development of the forecast;
the number and total amount of material costs;
valuation of future material income and flows;
rate of return;
determination of the number and degree of risks specific to this project on deposits.

If, as a result of the evaluation, it turned out that the investment price is much higher than the market price, then this means that the enterprise is extremely attractive for future investors. If the reverse situation is observed, then the attractiveness for investors is small. And this means that it will be more difficult to find people who would make an investment of money.

Synonyms

Investment cost

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In investing, as in other industries financial sphere, there is a certain terminology. In order to understand the concept of investment value, you need to understand what investment is in general.

Therefore, investing as a type of financial activity appeared in our country with the restructuring of the economy under the Western capitalist mode. In such an economy, investing your savings in some object for the purpose of making a profit is a good way to earn money.

What is investment value? This term should be distinguished from the market price, as these are completely different concepts.

The market value of any object is the price for which it can be sold, exchanged, bought. That is, this is his actual assessment. Investment value is something else entirely. This term reflects future returns for each specific investor. In this case, the future benefit is given to the present.

The fact that the investment price is different for different investors is quite reasonable and easy to explain. Each specific investor invests a certain amount of money in an object. Each of them has a different amount of deposits. Also, for each individual financial entity, the level of risks will be different. Accordingly, the profit from the investment object will also be different.

This type of value may go against the market. This happens for the following reason: the estimated income from the object may be higher than the market price of the enterprise or lower. It is a subjective measure of the value of an asset. It reflects the investor's intentions, which are not related to the sale and purchase and any commercial activity regarding the object.

Grade

If we evaluate the investment price of an enterprise, then this factor can provide voluminous and quite useful information about the development and prospects of this production. It can show how attractive it is for investments, as well as help in developing a financing plan.

The following factors are used to estimate the cost:

Tax status, and, accordingly, the amount of taxes paid by the enterprise;
The degree of development of the forecast;
The number and total amount of material costs;
Estimating the value of future material income and flows;
rate of return;
Determining the number and degree of risks specific to a given project on deposits.

If, as a result of the assessment, it turned out that the investment price is much higher than the market price, then this means that the enterprise is extremely attractive for future investors.

If the reverse situation is observed, then the attractiveness for investors is small. And this means that it will be more difficult to find people who would make an investment of money.

The main task for a specialist involved in attracting investors to the development of an enterprise is to increase the investment value by all available means. This will attract a large number of contributions, which will allow the enterprise to develop even more intensively. This task is carried out by studying the policy of contributions and ensures the competitiveness of production or firms.

This factor is very important in assessing the rationality of investments. It is he who will show the future investor whether it is necessary to invest in this project or is it another "dummy".

Let us now consider some kinds of values in use, which, unlike the values discussed above, do not belong to the values market type. IVS 2 describes bases of valuation other than market value, however to non-market prices do not include all of them, but only those of them, for the calculation of which internal (non-market) information and ideas about the value of the object of assessment of a particular market entity, and not the market as a whole, are used to a large extent.

The most important representative of value in use is investment value.

Investment cost- this is the value of the property being valued for a particular investor or group of investors for given investment purposes.

The investment value is determined based on individual requirements for investment, so its calculation is based on required by this investor income and a specific rate of their capitalization.

Unlike market value that assumes a "typical" buyer and a "typical" seller, investment value is based on the needs and characteristics of an investor whose motives are atypical for the market. This subjective concept, the calculation of which reflects the fact that this value is formed due to own preference, individual investment requirements and personal investor motivations, other than those of a typical buyer or seller, taken into account in determining market value, which relates the investment cost to the costs non-market type.

Investment value is related to the determination of the present value of future income streams expected from the operation of the property, the nature of which is specified. investment plans. For an investor important factors risk, volume and cost of financing, future appreciation or depreciation of property and tax considerations.

Sometimes in the literature, in the listings of appraisal purposes that use investment value, there are those that are not at all related to the concept of investment value or do not clearly correspond to it. For example, a valuation function such as “dealing with the valuated entity in a single counterparty” only speaks of a limited market, and not of the special opportunities and investor goals associated with the concept of investment value.

Investment value, like all value in use, is calculated using the Income Approach and, given the individuality of the valuation parameters, does not imply the use of the Comparative (Market) Approach.

There are a number of reasons why investment value may differ from market. The main reasons may be the differences that are reflected in the application of the Income Approach in the amount cash flow and the discount rate. They consist:

in assessing future profitability (required individual norm return on capital);
individual ideas about the degree of risk (not the market average);
the presence of an atypical tax situation (tax incentives, special tax status);
the presence of a preferential lending system that is not alienated from this particular owner (i.e., which does not pass to a new owner);
the possibility of compatibility of the property in its specific use with other objects that are also owned or controlled by the owner (synergistic effect, which can reduce risks due to some effects).

The investment value for a particular investor may differ from its market cost also as a result of different assessments of prestige, location prospects, etc.

Efficient use of a number of individual tools and capabilities of the owner can reduce investment risks and, accordingly, the discount rate. Thus, the investment value of the object may be numerically higher. market value due to its wider capabilities, different from those of the average market buyer.

This value may be higher than the market value also due to the specific interest of the investor. But it may be less market value due to the special interest of the seller (to sell cheaper, but to the right person) or in the case of using an object that is different from the NEI, but strictly defined by investment plans.

Investment value should not be confused with market the value of the investment property, i.e. the property in which the investment is made, which is at the stage of investment impact.

Use value- another representative of the value in use, when the value of property as part of the assets of the enterprise is determined when the assessment of the value of the enterprise as an operating one is realized (i.e. in general, for the current owner and at the current use, which may not correspond to its NEI). Typically, such an assessment is carried out for the purposes of financial reporting or the formation of internal management plans. Often, the valued object (real estate or equipment) can be used for only one specific (production) function, and its use value is estimated allocation method(allocation) from the value of the entire business.

Synergistic affect(from the word synergy(Greek συνεργία, from Greek. syn- together, ergos- acting, action)) leads to the fact that the sum of the costs of several parts is less than the cost of the new whole. The cost of the synergy effect is determined by capitalizing the savings arising for various reasons from various types of mergers (horizontally, vertically, conglomerate, etc.).
See subparagraph 5.5.5.