Reference
Valuation Glossary
A comprehensive guide to common terms used in property, business, vehicle, and asset valuations.
Amortisation
The gradual reduction of an asset's book value over its useful life, reflecting wear, age, or obsolescence.
Assessed Value
The value assigned to a property by a government body for the purpose of calculating rates or taxes.
Capital Gains Tax (CGT)
A tax levied on the profit realised from the sale of a non-inventory asset, such as property or shares.
Capitalisation Rate
The ratio of net operating income to property value, used to estimate the return on an investment property.
Chattel
Moveable personal property, such as furniture, vehicles, or equipment, as distinct from real property.
Comparable Sales
Recent sales of similar properties or assets used as a benchmark to estimate the value of the subject asset.
Cost Approach
A valuation method that estimates value based on the cost to replace or reproduce the asset, minus depreciation.
Depreciation
The reduction in the value of an asset over time due to wear and tear, age, or functional obsolescence.
Discounted Cash Flow (DCF)
A valuation method that calculates the present value of expected future cash flows, discounted at an appropriate rate.
Encumbrance
A claim or liability attached to a property, such as a mortgage, easement, or lien, that may affect its value.
Fair Market Value
The price at which an asset would change hands between a willing buyer and a willing seller, both having reasonable knowledge of relevant facts.
Forced Sale Value
The estimated amount that could be obtained if the asset were sold under duress, typically below market value.
Going Concern Value
The value of a business as an ongoing operating entity, including goodwill and intangible assets.
Goodwill
An intangible asset representing the value of a business's reputation, customer relationships, brand, and other non-physical assets.
Highest and Best Use
The most profitable, legally permissible, physically possible, and financially feasible use of a property.
Impairment
A permanent decrease in the value of an asset when its carrying amount exceeds its recoverable amount.
Income Approach
A valuation method that derives value by converting anticipated future income into a present capital value.
Intangible Asset
A non-physical asset such as intellectual property, patents, trademarks, or brand recognition that holds economic value.
Lien
A legal right or interest that a creditor has in the debtor's property, lasting until the debt is satisfied.
Liquidation Value
The estimated amount an asset would realise in a winding-up or closure scenario, typically less than market value.
Market Approach
A valuation method that estimates value by comparing the subject asset to similar assets that have recently been sold.
Market Value
The estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction.
Net Realisable Value
The estimated selling price of an asset in the ordinary course of business, less the estimated costs of completion and sale.
Obsolescence
The loss in value of an asset caused by factors such as outdated design, technology changes, or external economic conditions.
Plant & Equipment
Tangible assets used in operations, including machinery, tools, vehicles, and fixtures, that are not part of real property.
Residual Value
The estimated value of an asset at the end of its useful life, also known as salvage value.
Retrospective Valuation
A valuation that estimates the value of an asset at a specific date in the past, often required for tax or legal purposes.
Stamp Duty
A government tax levied on certain documents and transactions, including property transfers.
Summation Approach
A valuation method that adds together the individual values of land, improvements, and other components to arrive at total value.
Tangible Asset
A physical asset such as property, vehicles, machinery, or equipment that has a measurable monetary value.
Unimproved Value
The value of land excluding any buildings, structures, or other improvements made to it.
Useful Life
The estimated period over which an asset is expected to be usable or generate economic benefit for its owner.
Valuation Date
The specific date at which the valuation opinion applies, as market conditions and asset values can change over time.
Written Down Value
The value of an asset after accounting for depreciation or amortisation, reflecting its current book value.
Yield
The annual income from an investment, expressed as a percentage of the investment's cost or current value.
Zoning
Government regulations that dictate how land in specific areas can be used, which directly affects property value.