RSM Poland
Languages

Languages

Valuation of various types of assets - what are the differences?

Dawid STOLAREK
Corporate Finance Manager at RSM Poland

Throughout the course of your business and the transactions you make, you will come across assets of various types and features. Ensuring liquidity of assets depends on whether you are able to determine their value in terms of money. However, there are other reasons why preparing a valuation of assets may prove necessary - transaction goals (trading a certain good) being only one of them. Most often, valuation of a given asset is prepared in connection with reporting requirements or to serve as an opinion in on-going court proceedings. Valuation is also used in management of certain assets as a tool for identifying factors that promote the growth of their value. In business practice, three main types of assets that are most commonly the subject of valuation may be distinguished. These are:

  1. Enterprises,
  2. Real estate,
  3. Non-material assets (most notably – trademarks).

wycena_aktywow.jpg

The necessity of using estimates, and therefore preparing a valuation, is in the case of many types of assets the result of limited access to information on their actual value from an effectively operating market. A very large group of assets used in business operations is characterised by features that make them definitely unique. This uniqueness relates primarily to the gain expected from using the assets and the risk that follows.

So what are the differences in valuation of the above-mentioned groups of assets? How do their features influence the quality of the valuation? What is to be kept in mind when interpreting the obtained results? Below you will find a summary that may be considered an executive presentation of key issues related to valuation of enterprises, real estates and non-material assets. The summary does not elaborate on the various methods applied in valuation - this being perhaps a good subject for our next blog entry.

 

 

Real estate

Enterprises

Non-material assets

Requirements in the scope of possessing certain professional qualifications

YES

NO

NO

Reference to market data

YES – applies for both expected flows and the risk of their occurrence

YES, but only to a limited extent

Usually difficult to perform due to poor data availability and significant differences in the evaluated assets

Assessment certainty

High

Medium

Posing significant risk

Availability of information used in the valuation

High

High

Incomplete - which is reflected in, among others, the differences in applied methodology

Weryfikowalność

High

Limited

Limited

Blog - Autorzy

Anna MAJ (1)
Ewa PYTEL (1)