Financial Reporting Valuations

How to undertake valuations for financial reporting purposes is driven by the over-riding prescribed requirements which are usually based on either the International Financial Reporting Standards (IFRS) or International Public Sector Accounting Standards (IPSAS).

 

Most countries issue their own specific accounting standards based on the relevant international standards with no or minimal changes. For example: the Australian Accounting Standards (AASB) apply to the private, public and NFP sectors and are based on the IFRS with a few public and NFP sector nuances included as additional AUS paragraphs.

 

There are a range of different accounting standards under both IFRS and IPSAS which deal with specific types of assets or scenarios. These include the valuation approaches when assets are held for sale or impaired, whether there is an active market or if the asset is specialised in nature.

 

The key standards most usually applied include :-

 

  • IFRS13 Fair Value Measurement

  • IAS136 Impairment

  • IAS116 Property Plant and Equipment

  • IPSAS17 Property Plant and Equipment

 

Asset Valuer Pro has been structured to ensure full compliance with the relevant standards. This includes :-

 

  • Use of the correct approach and algorithms

  • Appropriate componentisation to ensure calculation of gross and depreciation expense figures for each part of an asset that has a different useful life

  • Auto-generation of relevant figures based on financial and where relevant Fair Value Measurement asset classes at Asset Class Level, Asset Level and Component Level

  • A range of analytical and validation reports

  • Production of relevant disclosure note information

Asset Management Planning

While Asset Valuer Pro is primarily designed to deliver valuations for financial reporting purposes it also delivers real power and value to an organisation via its Asset Management Planning capabilities. Using the data gathered from the asset valuation process Asset Valuer Pro provides users with access to features which usually are only available from expensive Asset Management Systems. 

 

These features are provide as standard outputs and include - 

 

  • Geo-spacial mapping of all assets so you can see visually see what assets you have what condition they are in. Want to quickly see those assets in a particular condition on a map? Simply click on the map where the assets are colour coded and can be easily filtered.

  • Stratification of your asset portfolio by both asset condition and asset value. This includes a dynamic tool that enables users to drill down through the data to help identify assets requiring further analysis or inspection.

  • Auto generation of a 50 years projected renewals program at Asset Class, Asset Type, Asset and Component levels with each also presented graphically summarised in intervals of 1, 3 or 5 years.  

  • Tabular analysis supported by graphs summarising portfolio value and condition analysed by Asset Type.

  • Detailed analysis of changes in condition, obsolescence and value over a five year period.

  • Whole-of-life cycle modelling and predictive analysis tool

Insurance Valuations

Asset Value Pro includes the additional value-added capability of calculating Insurance Values. This involves establishing a few basic assumptions for the time to demolish and reconstruct and allowances for professional fees, indexation and estimates of removal of debris.

 

Once the assumptions are established the Insurance Valuations are calculated automatically with the financial reporting valuations.

Financial Statement Notes

Production of the financial period-end valuations is only part of the process to satisfy the various valuation requirements under the accounting standards. Much of the work only starts once the figures are calculated.

 

The extra steps to ensure compliance, which are also delivered by Asset Valuer Pro, include –

 

  • Calculation of loss on disposal from full or part disposal

  • Calculation of Depreciation Expense

  • Calculation of Asset Revaluation Reserve adjustments

  • Reconciliation of the movements from opening balance to closing balance

  • General valuation and depreciation expense disclosure information

  • If under IFRS: Fair Value Measurement disclosures including reconciliations and information about valuation techniques and inputs

 

A key feature of Asset Valuer Pro is the ability of entities to tailor their own financial reporting hierarchy which enables all reports to exactly match their financial statement note disclosure requirements.

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