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Tangible Assets - Valuation of Land & Building and Plant & Machinery


Tangible Assets are assets that have a physical form and can be touched or felt. Tangible assets are susceptible to fires, natural disasters, and accidents. 

Tangible assets are further classified into 2 types:

  1. Fixed or Hard assets are those held by a business for a long time and cannot be easily converted into cash. These assets are long-term in nature and are used in the production or operation of a business. They are recorded on a company's balance sheet and usually depreciated over their useful life. This category includes assets such as Land, buildings, Property, machinery, computer equipment, tools, furniture, and fixtures. 

  2. Current or Liquid assets and inventory are those assets that can easily be converted into cash and are in the business for a short period of time, generally less than or equal to one year. Compared to fixed assets, current assets are significantly more liquid. Inventory refers to goods held by a company for sale or for use in production. A short-term asset, inventory consists of raw materials, work-in-progress, and finished goods. Its value is reported at its lowest cost or net realizable value. Examples of current or liquid assets are cash, cash equivalents, accounts receivable, stock inventory, and short-term investments.


Valuation of Tangible Assets

Valuation of Tangible Assets involves determining the fair market value of physical assets owned by a company or an individual. Tangible Assets include properties, buildings, land, machinery, equipment, vehicles, inventory, and other physical assets that can be seen and touched. The valuation of these assets is important for various reasons, such as financial reporting, insurance purposes, taxation, mergers and acquisitions, and asset management.

There are several methods commonly used to determine the valuation of tangible assets:

1. Cost Approach: This approach involves valuing tangible assets based on their historical cost or replacement cost. Historical cost refers to the original cost of acquiring or constructing the asset, while replacement cost is the cost of replacing the asset with a similar one at current market prices. Adjustments may be made for depreciation or obsolescence.

2. Market Approach: The market approach relies on comparing the tangible asset to similar assets that have recently been sold in the marketplace. Comparable sales data is used to estimate the fair market value of the asset. This approach is commonly used for real estate valuation, where sales of similar properties in the same area are analyzed to determine the value of a property.

3. Income Approach: The income approach is primarily used for income-generating tangible assets, such as rental properties or businesses. It involves estimating the present value of the future income or cash flows that the asset is expected to generate. The value is determined by discounting the expected cash flows using an appropriate discount rate.

4. Appraisal: In some cases, a professional appraiser may be engaged to assess the value of tangible assets. Appraisers use a combination of approaches, including on-site inspections, market research, and data analysis to determine the fair market value of the assets.

Note: The Valuation of tangible assets can be subjective and influenced by factors such as market conditions, location, asset condition, and the purpose of the valuation (e.g., for financial reporting, insurance, or sale).


Land & Building Valuation 

The Land Valuation is based on market price and property tax norms and standards in the locality or region. The Valuation of Land can be described as the technique by which the land valuation is ascertained. 

The Building Valuation is calculated by the current marketable cost of a building or any structure. The Valuation of Building is dependent on the type of structure, the location, size, shape, whether the building generates revenue, the width of the roads, frontage, and the types and quality of materials used in the construction, as well as the cost of these materials, which determines what value a building have. Valuation of the Building also depends on the height of the plinth, the height of the building, the thickness of its walls, and the nature of the structure (such as Load-bearing or framed structure).


Importance of Land & Building Valuations

Land & building valuations are important for a variety of reasons, and they play a crucial role in various aspects of real estate, finance, and property management. Here are some of the key reasons why the land & building valuations are important:

1. Real Estate Transactions

2. Financing and Lending

3. Investment Analysis

4. Property Management

5. Legal Disputes

6. Financial Reporting

7. Urban Planning

8. Market Analysis


Property Valuations & its importance

Property valuation refers to the process of determining the economic value of a real estate property.

Property Valuation Services are important for buyers, sellers, investors, lenders, insurers, tax authorities, legal matters, and property management. It helps people know the fair and accurate assessment of a property's worth, enabling informed decision-making in various scenarios which are as follows: 

1. Buying and Selling

2. Real Estate Investments

3. Financing and Mortgage

4. Property Taxes

5. Insurance Coverage

6. Estate Planning and Legal Matters

7. Property Management

Property valuations should always be conducted by licensed or certified valuers who have expertise in assessing real estate values because the property valuation process is crucial in determining the fair market value of a property, which helps buyers, sellers, investors, lenders, insurers, tax authorities, legal matter experts, and property dealers a lot in several ways as we discussed above.

The cruciality and importance of property valuations in India, we should always hire an expert property valuer like R.K Associates, which is one of the well-recognized property valuer in Noida & Property valuer in Delhi NCR which have highly skilled property valuers for assessing the property valuations in India. 


Plant & Machinery Valuation

Plant & machinery Valuations refer to the process of determining the current or market value of equipment, machinery, and other tangible assets used in various industries and businesses. 

The choice of valuation method depends on the specific circumstances and the type of asset being valued. It's important to note that different industries and regions may have unique practices and standards for plant and machinery valuations, and it's advisable to consult with experienced professionals or appraisers to ensure accurate and reliable valuations.

Importance of Plant & Machinery Valuation

Plant & machinery valuation is essential for providing a foundation for informed decision-making and is integral to the overall financial health and success of a business for various reasons across different sectors and industries. Here are some of the key reasons why the valuation of plant and machinery is important:

1. Financial Reporting, Accounting & Planning

2. Asset Management

3. Mergers and Acquisitions

4. Risk Management

5. Dispute Resolution

6. Strategic Decision-Making



How will R.K Associates help you in the Valuation of Tangible Assets?

It's important to note that the valuation of tangible assets can be subjective and influenced by factors such as market conditions, location, asset condition, and the purpose of the valuation (e.g., for financial reporting, insurance, or sale). This is why valuation experts from reputable firms should always be hired to provide an accurate assessment of the value of tangible assets.

R.K Associates is a well-reputed tangible assets valuation firm that has valuation experts who have the capacity and rich experience to do Plant & Machinery Valuations, Land & Building Valuations, Property Valuations, and Industrial Valuations in India for various infrastructure sectors including roads & civil infrastructure, ports, energy, utilities (power, water, and waste), etc. We have valuation experts who specialize in valuing oil & gas assets. We are the most trusted property valuer in Noida and property valuer in Delhi NCR.

Our experts consider all relevant factors to assign true market value to every asset and in accordance with the valuation study we prepare reports with both international and country-specific guidelines. Having worked in valuation for more than 30 years, we have a proven track record of success.





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Contact Us

Email Us : valuers@rkassociates.org
Call Us : (0120) 4110117, 4324647, +91-9958632707
Address : D-39, 2nd Floor, Sector-2, Noida, Uttar Pradesh -201301

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