Valuations

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Valuations Purpose

MAM team provides confidential and independent valuations services for property, plant machinery & equipment and infrastructure. Our specialised valuation services include:

Insurance & loss adjustment

At the time of insurance, it is essential to ensure that the property, plant, machinery & equipment, stock and Infrastructure assets are neither under insured nor should a high premium be paid. It is not uncommon to come across a situation where business has to suffer a loss just because of being over/under insured.

Insurance Valuations are a specialised area of valuation practice requiring in-depth experience and knowledge of insurance and the assets of particular property & plant machinery and equipment, stock items and Infrastructure.

Under insurance is alive well and living in Australia. Whether it’s Business, Property, Plant Machinery Equipment & Contents, stock or Life Insurance, most Australians have insufficient cover.

Almost 1 in 4 Australians have no form of home and contents insurance at all.

Approx. 50% of businesses are under-insured.

It is a sad fact that many small businesses fail after an unexpected event because of inadequate insurance. Research has shown that 70% of uninsured or under-insured businesses that incur a major insurable loss fail within the following year. There is a high social & economic cost to underinsurance.

Examples why Under insurance occurs

  • General rise in re-building costs
  • Under estimating the full costs of demolition and debris removal
  • Selecting an appropriate sum insured us on the policyholder. This is an intrinsically difficult task.
  • Lack of information by individuals about potential risks to property from weather related and other risks, as well as affordability issues.

Examples of large insurance claims and “under-insurance” in Australia

Property:

  • 1974 - Brisbane Floods
  • 1974 - Cyclone Tracy
  • 1999 - Sydney Hailstorm
  • 2003 - Canberra Bush Fires
  • 2003 - Mt Stromlo Observatory
  • 2009 - Victorian Bushfires
  • 2011 – Christchurch Earthquake
  • 2001 – World Trade Centre – New York

Plant & Equipment:

  • 1990 – Australian Media Company
  • Nz – South Island Dairy Factory
  • Nz Pet Food Manufacturer
  • Sydney Food Processing And Retail Company

Professional Insurance Valuations Should Be Conducted Every 3 Years. Approximately 80% of insurance valuations undertaken, companies have been found to be underinsured.

Our Engineers and Registered Valuers are specialised in understanding the client’s asset insurance requirements and provide Insurance valuations based on Reinstatement, Replacement and Indemnity value which largely depends upon the type of policy undertaken, policy wordings and the client’s requirements. Valuation reports prepared by Registered Qualified Valuers for insurance purpose are in accordance ISR Mark V Policy wordings as well as relevant valuation standards applicable locally.

Also, our Valuers and Engineers can assist with insurance claims (loss adjustments) by ensuring their validity, inspecting and assessing the damage and loss to insured businesses to estimate insurance costs. We support you at times of loss. We are the 'bridge' between the insurer and the insured and their objective is to establish an outcome that is fair and reasonable to all parties.

Financial Reporting (In accordance with relevant IFRS-International Financial Reporting Standards for Fair Value Reporting IFRS 116 & 13/ AASB 13 - Australian Accounting Standards Board)

MAM empowers decision-makers with the confidence that they are accurately reporting the government or company's financial position while simultaneously providing them the market intelligence needed to make the best business decisions.

MAM is completely independent and our valuers meet the stringent requirements of major accounting firms and government requirement. Our valuation services satisfy both domestic and international financial reporting standards and provide the foundation for accurate financial records. We see the big picture, elevating a mundane exercise into a strategic process.

MAM specialises in valuation for various purposes including for financial reporting (as per AASB 116, AASB 13) and Impairment (AASB 136).

As per Accounting Standard AASB 116 para 34

“The frequency of revaluations depends upon the changes in fair values of the items of property, plant and equipment being revalued. When the fair value of a revalued asset differs materially from its carrying amount, a further revaluation is required. Some items of property, plant machinery & equipment and infrastructure assets experience significant and volatile changes in fair value, thus necessitating annual revaluation. Such frequent revaluations are unnecessary for items of property, plant machinery & equipment and infrastructure assets with only insignificant changes in fair value. Instead, it may be necessary to revalue the item only every three or five years.”

Hence, it is necessary to engage an experienced and qualified valuer. At MAM, we have experienced and qualified Valuers and Engineers abreast with up to date knowledge of relevant accounting and valuation standards valuations for Fair Value measurement (AASB13/IFRS13).

Sale or Purchase of a Property & Business assets

Working out the value of any property & business is significant when buying/selling the business, as it can help you decide on an accurate price to buy or sale the property or plant machinery and equipment in business. The value of business can also depend heavily on the industry, and the current marketplace value of similar businesses within that industry.

At MAM, we can verify/prepare detail independent fixed asset register of physical assets such as property, machinery, buildings, equipment, and for stock items. We are committed to achieving the most effective outcome for our client based on analysing company’s asset register, finding trends within industry's market, and helping / working out a value for asset/business by using different valuation approach.

Partnership Dissolution

Business that is structured as a partnership or company may require property, plant machinery and equipment valuation for below purposes;

  • the partnership tenure expired
  • one partner decides to leave partnership
  • partner(s) can no longer legally own a business a court order to dissolve partnership a death of one of the partners partnership eventually terminated and or a new partner is being admitted

MAM Engineers and Valuers are flexible to work on-site to create detailed fixed asset register lists if required. We have in-depth market analysis knowledge pooled with the exclusive network of industry contacts and the Australian Property Institute (API) Registered valuers-accredited team, in addition to the direct recovery experience of our own industrial disposition experts.

Due Diligence

Due Diligence is an important step to confirm all assets and developing inventory list of each key assets. The listing also includes the physical depreciation and obsolescence (physical, technical, function and economical obsolescence).

Fixed assets play a huge role in financing an acquisition and helping an owner to obtain a loan. Hence, the sellers need to spell out complete list of fixed assets to the buyer during due diligence. This information should include at least the followings as minimum:

Listing of all fixed assets, including information on owned/unencumbered & encumbered and rented or leased assets Information on the fixed assets, including a basic description, purchase date and price, depreciation years, accumulated depreciation, net book value, asset location, specification of assets, method of depreciation used etc.

Listing of sales and purchases of major capital property, plant machinery and equipment Listing of unpaid balances and open purchase commitments for any capital equipment in process Listing of any surplus or idle equipment and the equipment value listing of properties, building, land, Vehicle, infrastructure, etc.

MAM will verify that the property, plant machinery and equipment transaction comply with investment or acquisition criteria. We will further confirm that an asset is what it appears to be and identify potential "deal killer" defects. We will help avoid a bad business transaction to our client. We will assist with useful information to complete transaction and define representations and warranties, and/or negotiating price concessions.

Tax Consolidation and Tax Purpose

Fixed asset valuers (residential, commercial, industrial, retail, rural properties and/or machinery, equipment, appliance, pressure vessel, implement and tool, etc.) adopt the market value definition based on the International Valuation Standards Council (IVSC) or Australian Property institute (API) and base their valuation on its highest and best use.

MAM Engineers and Valuers are knowledgeable of current market trends and conditions for the type of property, plant, machinery and equipment and infrastructures subject to valuation for Tax Consolidation and Tax Purposes. We also refer to current market transactions to establish the basic data for valuation assessment.

Pre-Insolvency, Insolvency & Liquidation Matters

Insolvency & Liquidation process is the unfortunate condition of a business that is unable to pay debts as they come due in the ordinary course of business, and/ or that has liabilities that exceed the total value of assets when both are assessed at their economic values.

The valuation of businesses in insolvency & liquidation is important to the creditors, shareholders, and other stakeholders as a basis for negotiations between these parties over the future of the business. For each stakeholder in an insolvent business, the relevant question is how to maximise its position.

It is also sometimes necessary to value insolvent or liquidation businesses for the purposes of dispute resolution – for example, if a Claimant has been forced into insolvency or liquidation by the wrongful actions of a Respondent.

The two main routes that an insolvent or liquidation business can take are;
(a) to restructure its debts to manageable levels and continue trading as a going concern, or
(b) to liquidate the business, selling off business or physical assets piecemeal, and returning the proceeds to creditors.

Valuing an insolvent or in liquidation business therefore involves identifying alternative scenarios for the business, and identifying the value of the business overall in each scenario. For the purpose of restructuring an insolvent entity, each party will then typically identify the value it will achieve in each scenario, and enter negotiations over the future strategy of the business.

At MAM our Engineers and Valuers have sound knowledge and experienced in insolvency and liquidation matters, providing our clients well researched and independent valuation advice and for auction realisation service with forced Liquidation, orderly liquidation and market value for going concern values.

Litigation & Family Law Determination – Expert Witness

Having the right witness can make or break a case, especially when technical and quantitative issues are involved in property, plant, machinery and equipment valuation related disputes. With professional training and designations recognised by the court, MAM team of experienced expert witnesses have real market experience, understand what makes successful outcome and speak authoritatively to asset values in property, plant, machinery and equipment valuation disputes.

Our experts have the uncommon ability to explain complicated concepts in basic terms so judges and juries are presented with the compelling facts of the case in a manner that is understandable – the kind of evidence that wins cases and drives settlements for property, plant, machinery and equipment valuation related disputes.

We understand that the valuation report provided by valuers are scrutinised heavily, challenged by the opposing valuer and Barrister for weakness, mistakes, poor evidences etc. Also, we will be cross examined about the report with an aim to unsettle our self, our analysis, assumption and our credibility as an expert witness. At MAM our registered valuers have sound knowledge and are experienced in Family law & Litigation matters, providing our clients well researched and independent valuation advice after taking due care.

Our Certified Practising Valuers (CPV) will access the property market value based on the local market evidence by sales of similar size and style properties/ equipment. The result is an independent valuation by a qualified expert and a quicker resolution to property matters so that divorced couples can begin to recover and restructure their lives as speedily as possible.

Impairment Testing of Assets

Based on International Financial Reporting Standards (IAS 36) and Australian Accounting Standard Board (AASB 136), Impairment of Assets is the procedures that an entity applies to ensure that its assets are carried at no more than their recoverable amount.

Below are few signs of impairment assets.

External factors such as:

  • Substantial reduction of assets market value
  • Substantial negative fluctuations in technology, markets, economy, or legal laws
  • Main rise in market interest rates
  • Company’s net assets are higher than market capitalisation
  • Assets having obsolescence or physical damage
  • Asset is idle, part of a restructuring or held for disposal
  • Poor economic performance than projected;
  • MAM is also known for its specialised knowledge to undertake valuations for impairment of assets.

Physical Verification of Assets and Preparation of Fixed Asset Registers

The fixed assets register shows the value of assets, historical purchase date and other details required to compute for depreciation/ tax purposes and to track the property and assets owned by a business.

Our engineers and experts can prepare the custom made fixed assets register, conduct the full inventory and tagging of all property, plant & equipment or stock items.

Purchase Price Allocation

A purchase price allocation (PPA) classifies the purchase price of business into the numerous assets and liabilities acquired. A PPA is basically identification and assignment of the current market value of all tangible, intangible assets and liabilities assumed in a business acquisition as at the date of transaction. The difference between the purchase price and the sum of assets and liabilities is then recognised as goodwill.

At MAM, we understand that Purchase Price Allocation valuation exercise is a requirement for accounting reporting standards and our experts has extensive experience in conducting purchase price allocations valuation and achieving best suitable outcome for our clients.

Stamp Duty

Stamp duty valuation (property) is required by the office of state revenue (OSR) by a registered property valuer when transferring ownership between related parties. The stamp duty paid is based on the current market valuation provided by qualified registered valuer. Stamp duty valuations are also required where property is being transferred into a super fund, various trusts and entities.

The sale between related parties’ property transfer is not considered an arm’s length transaction and not accepted by OSR. The office of state revenue (OSR) requires a current market valuation from a qualified registered valuer to determine the amount of stamp duty applicable on the transfer.

Monita Asset management (MAM) have qualified, highly experienced and registered valuers to provide stamp duty property valuation reports for Office of State Revenue.

Bank Finance and Refinancing

The financial institution/lender are lending you the money responsibly and normally they ask you to obtain a valuation so they can be undisputable on the value of the asset is greater than the loan amount.

MAM conducts the refinancing valuations based on our precise data collection procedures and researching approach which mean that financial institutions/ landers can trust on our valuation and asset can be registering in the PPSR accurately.

Our highly experienced and Certified Practising Valuers (CPV’s) undertake valuations, with the due diligence and care required by clients which resulted a peace of mind and fast refinancing solution.

Compulsory Statutory Acquisition – Just Term Compensation

The government can acquire privately owned property/land for public purposes. They may acquire the whole property, part of a property or an interest in the property The Valuer’s (as an expert) degree of expertise may determine the success or failure of particular claim for compensation.

Government will, at the relevant time, contact owners of affected properties. If private property is directly affected, Government has the authority to acquire (under the NSW Roads Act (1993) within NSW) either by negotiation and agreed sale or through a compulsory acquisition process.

An owner’s entitlement to compensation for their property/land being acquired is provided by the Land acquisition (Just Terms Compensation) Act 1991. The brief process is listed as under;

Compensation Amount

The compensation amount to which a person is entitled under the Just Terms Act is such amount as, having regard to all relevant matters under that Act, will justly compensate the person for the acquisition of the land: s 54(1).

In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only ( s 55):

  • the market value of the land on the date of its acquisition,
  • any special value of the land to the person on the date of its acquisition,
  • any loss attributable to severance,
  • any loss attributable to disturbance,
  • solatium,
  • any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.

MAM experts can provide help with compensation negotiations process which fundamentally will aid assessment of the correct level of compensation. In order to compute correct property Market value based on other heads of compensation under the Land Acqusition and Compensation Act, the valuer must have knowledge of the Act including several heads of compensation.

For details understanding on the process, claims, need a help for an expert witness valuations with detailed reports for the court on the compulsory acquisition, please contact MAM Team Members on on 0404 581 553 or enquire online now.

Capital Gain Tax

Capital gains tax (CGT) valuation is required when you usually make a capital gain / loss on the disposal of a capital asset that was acquired after 19 September 1985.

In general, the plant machinery and equipment assets are depreciated assets and are not subjected to capital gain tax whilst, at most instances, property is subject to capital gains. In order to calculate the CGT, professionally qualified registered property valuers are required to compute an accurate market value of the property.

Most common capital gain tax scenarios

  • Primary Residence turning it into an investment property
  • Selling an investment property
  • An investment property converted to primary residence
  • foreign buyers of Australian property
  • Gifting a property also triggers the need to pay CGT.

MAM Experts can undertake a current market valuation or a retrospective market valuation (property valuations) for CGT purposes. We understand that our valuation report will assist to derive your capital gain tax obligation and will do our best to assist you in matter.

Customs Value Valuation

For plant, machinery and equipment, the Customs Value Valuation are conducted based on the market value of plant and equipment as at date of valuation. The Customs Value is the value of the plant and equipment on which duty will be charged excluding overseas transport and insurance.

The concern authority may issue the penalties for breaches of the Customs Act including breaches that result from underpayment of duty. These penalties are being issued regardless of whether the exporter / importer intended to breach the Customs Act related to that country.

At MAM, we have experienced and qualified valuers abreast with up to date knowledge of relevant compliance related to custom value valuation, please contact MAM Team Members on 0404 581 553 or enquire online now.

Bail Application Valuation

The Bail Application Valuation is required where the property is used as security for the release of an individual on bail. A valuation for Court Bond is a valuation conducted for the purpose of presenting it in a court of law so that a bond may be granted.

The property owners including suspect or his family member or friend, called the ‘surety’ can use their property as security. The surety is required to reveal that there is an appropriate equity in property after deducting for mortgages and other debts. The Certificate of Title and a updated mortgage statement is required in addition to the property valuation conducted by registered valuer.

We understand the situation and importance of valuation report in this state of condition. Our independent registered qualified valuers are experienced to provide an accurate report that helps in process in the short timeframe. In most cases, we can provide valuation report within a 24-hour for standard property subject to availability of site access.

For further details, please contact MAM Team Members on 0404 581 553 or enquire online now.

Feasibility Studies & Development Consultancy

Also, project feasibility is an evaluation of the potential profitability of that project, or a study that measures the expected benefits from a certain project relative to its cost. It also assesses and identify the opportunities and risks of a property development project, estimate the costs, revenues and profit potential of the project.

Owners, decision makers and landers build their decisions to proceed with and/or finance any project based on the results of the feasibility study of that project.

Conducting an economic feasibility study for any project entails committing valuable resources in terms of time and cost.

Check List - Factors to consider in addressing the variables applicable to feasibility studies include the following;

  • Estimating development costs;
  • Estimating income
  • Estimating gross realisation;
  • Carry out a sensitivity analysis based on marginal variation between those variables which inform the assessed viability outcome.
  • Appropriate to summarise the results of the feasibility study in terms of the original brief and instructions
  • Residual Land Value Is deduced from an analysis of a proposed development in which the gross realisation of the developed land is contemplated and from which is deducted all costs associated with achieving the anticipated gross realisation. A representation of applicable costs is set out in an exampled feasibility analysis later in this TIP. The residual land value is that price which a developer can afford to pay to purchase the land knowing all the variable input costs associated with the proposed development in order to achieve the anticipated gross realization.

We look forward to discussing how we can help you to make informed property decisions. Our fees are reasonable when linked to other valuation firm. Please call us directly at (02) 8608 4822/0404 581 553.

Property Market Analysis and Advice (advice require for buying, managing, selling property, Investment Strategies- Making the right choices)

Property Market Analysis is the key to looking forward and the foundation for most property professional opinions. Our experts understand the current market and can make reasoned predictions on future market trends. The analysis of property markets is complex, challenging and crucial that property market analysis should undertake by competent valuers.

We examine the nature of property market analysis; starting with its evolution within the property economics field, the current market change factors and noting the inaccuracies in property forecasts. The property market analysis and advice require for buying, managing, or selling property.

Our teams consisting of experienced practitioners with specialist academics undertaking longitudinal studies for market analysis property including suburb for investing, property trends, Booming Suburbs, Interest rate effect, What’s really happening in property?, potential capital growth suburb in the next five years, Australia's safest suburbs to invest in, Capital growth VS Cash flow etc. For further discussion please call us directly at (02) 8608 4822.

Valuation Review

A property owners who remains dissatisfied with the determination of the valuers decision, the objection may apply for a review of the valuation by an independent valuer. A “valuation review” varies from other types of valuation as it does essentially comprise the provision of a valuation opinion by the reviewer.

If you need help with any valuation review, call our specialists on 02 8608 4822 or enquire online now.

Calculations of Unit Entitlements

Based on the recent amendments to the NSW Strata Titles Development Act and Strata Titles Management Act, the Valuers are now accountable for the valuation of unit entitlements in new strata buildings and in older buildings that are changed to strata title and for the redetermination of Unit Entitlements’ where the existing Unit entitlement is considered unreasonable.

If you are requiring a Unit Entitlement Valuation and strata plan form 3.07 form to register strata plan please contact us on 02 8608 4822 / 0404 581 553.

Easement Valuations

Easement Valuations requires experience valuer with knowledge of the relevant laws. A right annexed to land to utilise other land of different ownership in a particular manner or to prevent the owner of the other land from utilising his land in a particular manner.

Dominant Tenement – Benefited Land

Servient Tenement – Burdened Land

Positive Easements – rights of entry to enable something to be done on land

Negative Easements – rights to prevent something being done

It is generally accepted that there are four essential requirements for an easement:

  • There must be a dominant and servient tenement
  • The easement must accommodate the dominant tenement
  • The same person must not own and occupy the dominant and servient tenements
  • The right claimed as an easement must be capable of forming the subject matter of a grant.

Easements in Gross – exception to common law requirements as no dominant tenement Creation of Easements

  • Express easements
  • Implied easements

Easements can be created when land is subdivided or created by long use. Easement compensation is computed by considering several compensations heard.

Our Registered valuers have in-depth knowledge, extensive experience and formal qualifications for finding accurate compensation for similar valuation. For details discussion please call us directly at (02) 8608 4822/0404 581 553.

Rating Objections

The Valuer General provides land values to councils to use in setting rates. Councils receive new land values for rating every three years. MAM Rating and Taxation experts assist owners and tenants throughout Australia in reviewing valuation for statutory valuations which are utilised to levy rates and land tax. We ensure that the statutory assessments conducted is fair and reasonable. We will assist our clients in valuation review based statutory assessments, following with objections and appeals, and appearing as an expert witness in relevant court or tribunal.

Please contact MAM Team Members on 0404 581 553 or enquire online now.

Rent Determination

Market Rent Determination is most challenging part for valuers and require great care and expertise.In assessing market rent, we consider the most appropriate evidence in the market place. The greatest evidence is usually rentals which have been agreed in comparable tenancies, at the applicable date with vacant possession (i.e. new lettings between arms-length parties), and in particular, where the use is the same or a substantially similar use as the permitted use under the lease.

In the absence of new lettings evidence, we consider the rentals agreed between arms-length parties at lease renewal or at the exercise of an option to renew an existing lease; rentals agreed at market rent reviews; and the outcome of mediations or determinations.

If you require a market rent review, Monita has a team of experts to undertake an independent review. Please contact MAM Team Members on 0404 581 553 or enquire online now

Pre-Purchase or Pre-Sale or Pre-Auction Market Value

Buying a home will probably be the most expensive thing you ever do. Likewise, when selling a property understanding the local market and setting a price is vital. We provide valuation and property advice for our client to make a sound decision when purchasing and selling a property, plant machinery and equipment or for investment purposes.

Our experts provide specialised advice to confirm our clients are furnished with prevailing market information, and peace of mind, at a minor cost to the overall investment. Please contact MAM Team Members on 0404 581 553 or enquire online now

Kerbside or Drive Through Valuation

For Kerbside or Drive Through Valuation, we personally inspect the property externally and no internal inspection is conducted. This process is carried out by a registered Valuer who inspect the property externally perceiving all characteristics of the subject property, location, aspect, noticeable environmental issues, nearby development, etc.

Please contact MAM Team Members on 0404 581 553 or enquire online now

Desktop Valuation

At some instances, the valuation is required to conduct without an onsite inspection. MAM can provide with a desktop assessment which will help to solve the purpose and save money. We will require a sufficient data on the property or machinery/equipment subject to valuation.

Please contact MAM Team Members on 0404 581 553 or enquire online now

Probate and Deceased Estate

Valuation of deceased estates and properties is conducted mainly because for settlements and to avoid disputes, especially between beneficiaries who are most often family members. A probate property valuation report is also commonly used to help identify the fair market value of a deceased estate on behalf of the beneficiaries, so that tax liabilities can be assessed correctly.

An independent Property Valuation Report will be required by the Office of State Revenue to confirm the stamp duty payable on all sales between related parties. At Monita, we are offering a discount on valuation services provided to Seniors Card and Carers Card holders. Please contact MAM Team Members on 0404 581 553 or enquire online now.

Self-Managed Super Funds (SMSF)

A valuation is a key component and compulsory to confirm your SMSF has obeyed with related super law for: preparing the funds financial accounts/ statements, buying assets between SMSFs and related parties, investments made and maintained on an arm's-length basis.

Superannuation funds should use market value valuation, may be conducted annually or every three years for financial statements.

Law states that a valuation must be made at a market price determined by a qualified independent valuer. Monita has a team of experience people to undertake an independent Self-Managed Super Funds (SMSF) valuation. Please contact MAM Team Members on 0404 581 553 or enquire online now

Retrospective Valuations

“A valuation taking effect from a date in the past”.

In the situation of the dispute resolution process or capital gain tax or for other reasons, it is common for lenders, individual or accountants to instruct a Valuer to prepare a 'retrospective valuation' to assess the market value valuation for past date.

Our expert team can provide a retrospective opinion as to market value or we can prepare a critique that assesses whether or not the Original Valuation, in the opinion of the expert, lacked reasonable care.

Retrospective Valuation are usually required in capital gains valuation to work out the back dated property value (eg. 2000) for computing capital gains tax at the fact where the property becomes an investment property. Please contact MAM Team Members on 0404 581 553 or enquire online now.