Market Value Assessments & Premise of Value
At Australian Valuationsour commitment is to deliver independent, accurate and supportable valuation advice to our clients. We deliver on our commitment by understanding our clients’ business operations, their asset requirements and the intended use of the valuation. Understanding your requirements is key to the application of the ‘Premise of Value’ concept when providing market based appraisals.
‘Premise of Value’ is an assumption regarding the most likely set of transactional circumstances that may be applicable to the subject valuation. It is incumbent on the valuer to understand the valuation purpose and to determine the appropriate basis of value when providing a Market Value appraisal.
Value is defined as “…an economic concept referring to the monetary relationship between goods and services available for purchase and those who buy and sell them.”
The definition of Market Value is expressed in universal terms to reflect a general concept rather than specific circumstances. On its own, the definition of Market Value doesn’t describe how a particular asset is to be presented for sale or any of the other specific circumstances that could have a significant impact on the valuation. Application of the appropriate basis of value will depend on the purpose for which a valuation is required and the circumstances. Below are some commonly used market value definitions.