ESSENCE OF VERIFIED AND VALUED ASSETS REGISTER/REPORT FOR IMPROVED DECISION MAKING BY A BUSINESS ORGANIZATION.

Often times, one can hear business owners ask the question "Why do I need Asset Valuation? "Of what benefit is Assets Valuation to my business?. These are very vital questions that requires informative and convincing answers.

For example, it is possible for a business owner to seek Permanent Residence in developed countries like the US, Canada and some parts of Europe through investment if such a person is willing and capable to invest in a business up to a certain amount in such countries.

However, such an investor will need to provide a proof of already thriving business in the home country in terms of assets and cash flow.

First, let's look at what Valuation simply means- Valuation is a process of estimating the value, which consists in recognising both the characteristics of the object and intentions of the subject and is aimed at assigning monetary value to events or objects.

It is an excercise to ascertain the monetary worth of an object in economic terms based on the nature of the object, the market trend at that time.

Asset valuation on the other hand simply pertains to the process of determining the value of a specific property, including stocks, bonds, building, machinery, land, motor vehicles, company logo etc.

Therefore, a company or an organization assets may be categorized into tangible and intangible assets. Tangible Assets are assets with a physical form and that hold value. Examples include property, plant, and equipment.

These are a company’s or business organization assets that have a physical form, which have been purchased by the organization to produce its products or goods or to provide the services that it offers. Tangible assets can be categorized as either fixed asset, such as structures, land, and machinery, or as a current asset, such as cash. Other examples of assets are company vehicles, IT equipment, investments, payments, and on-hand stocks.

Intangible Assets are identifiable, non-monetary assets without physical substance. They are assets that take no physical form, but still provide a future benefit to the company. They may include patents, logos, franchises, and trademarks. Say, for example, a company with assets worth several millions or billions goes bankrupt one day, and none of its tangible assets are left. It can still have value because of its intangible assets, such as its logo and patents, that many investors and other companies may be interested in acquiring.

That took us to examine the essence of assets valuation for improved decision making by a business organization:

Asset valuation is one of the most important things that need to be done by companies and organizations. There are many reasons for valuing assets, including the following:

1. Right Price

Asset valuation helps identify the right price for an asset, especially when it is offered to be bought, sold. It is beneficial to both the buyer and the seller because the former won’t mistakenly overpay for the asset, nor will the latter erroneously accept a discounted price to sell the asset.

2. Company Merger:

In the event that two companies are merging, or if a company is to be taken over, asset valuation is important because it helps both parties determine the true values of the businesses coming together for a merger.
So a register/report of valued assets already available would make the merger or aquistion process easier and faster even if the asset register need to be updated.

3. Loan Application:

When a company applies for a loan, the bank or financial institution may require collateral as protection against possible debt default. Asset valuation is needed for the lender to determine whether the loan amount is covered by the organization assets as collateral.

4. Audit:

All public companies are regulated, which means they need to present audited financial statements for transparency. Part of the audit process involves verifying the value of assets. So it makes the work of auditors easier when a company already has a register of valued assets. Such a register/report will only require periodic updating.

5. Verification:

To confirm that the valued assets are actually in existence.and ascertain that the assets had been acquired for the purpose of the organization operations and under proper authority.

6. Policy Making:

Ascertain that no change has been created on the asset or encroachment (most especially undeveloped land) and cconserve adequate funds in the organisation for replacement of some fixed assets at the end of their useful lives.

In line with the above aim and objectives, should you wish to engage a firm of Chartered Estate Surveyors & Valuers for the valuation of your company assets. Contact us through ☎+2348032296562, ☎+2349049045703, ☎+2348117949689 (Whatsapp Messages Only).

Thank you.