Equity Valuation

When we think about knowing the true value of an asset, we must clearly and objectively deal with it.

The equity valuations define the course as follows, the decision making when placing an asset in some transaction involving a mortgage guarantee, financing, giving in payment, etc.

When we value an asset, we have a responsibility to attribute the fair value, the Real value, and for this, a number of factors give us the conviction to reach the final result, that is, the correct value of the asset.

The valuation engineering has as premise the elaboration of technical reports of valuation, being responsible for the attribution of the values to be sought. It is up to the Engineer and/or Architect, the formation of these numbers through the formatting of the valuation following the guidelines recommended by the Brazilian Valuation Standard, NBR 14653.

Ethically speaking, the appraiser should not transact the assets valuated, or have any direct or indirect interest in that real estate or personal property, thus guarding against any tendency to manipulate the results.

When you are valuating your asset, think carefully. Hire a specialized company, do not accept unsubstantiated opinions or from professionals not qualified for this purpose. Take good care of your equity.

Equity Management of Avalor

In the Equity Control and Management service – Equity Valuation – Avalor offers its partners and clients the best management practices:

Dedicated consultancy in the implementation of Accounting and Insurance Equity Management (ERP Integrated Systems);

Physical inventory collating the assets by Centers of Responsibility, location, position, departments, so on;

Content assets tagging, using barcoded and/or numbered labels, chips, special tags, etc.;

Technical description of each equity item;

Physical and accounting settlement;

Adjustment of physical x accounting surplus;

Reconstitution of accounts aiming at the following tax resolutions.

IN 68/86, CIAP, PIS/COFINS, FASB, IAS 16, FISCO, etc.

Guidelines to be taken in accordance with the tax impacts related to the Equity Management.

Technical definitions for determining remaining useful life.

Valuation Engineering – Equity Management – CREA/CONFEA

The whole concept of work is based on the laws of the CONFEA system, within the professional qualifications of each execution.

The purpose of the Equity valuation is to establish the replacement, depreciation and market values of all personal property and real estate that are part of the company’s equity, in order to determine the overall value of the Fixed Assets.

The Equity Valuation is based on the rules in force determined by ABNT, based on a specific methodology using the values of the assets that aggregate the equity of the entity. The product of this study are the technical reports.

Any and all valuation must be substantiated and developed through several usual methods with a level of accuracy and rationale.

SOME APPLICATIONS: IFRS compliance, insurance, mergers, spin-offs, incorporations, financing, impairment test (or recoverability), useful life, economic value, lease renewals, goodwill, trademarks, and patents, among others.

EQUITY VALUATION ADJUSTMENTS

According to law 11.638, which amended some provisions of law 6.404/76, this law results in the integration of the international concept for Brazil, make a single law for all.

The equity valuation adjustment account should be considered as a correction of the value of assets and liabilities for a better view of the equity, with respect to their replacement value, or fair value.

The purpose of this Pronouncement is to establish the basic requirements to be observed when calculating the Present Value Adjustment of assets and liabilities when drawing up financial statements, resolving some controversial issues arising from such procedure:

If the adoption of the present value adjustment is applicable only to contracted cash flows or whether, perhaps, it would also be applied to estimated or expected cash flows;

In situations which the adoption of the adjustment to present value of assets and liabilities is required, if at the time of the initial recording of assets and liabilities, if in the change of the valuation basis of assets and liabilities, or if at both times;

If non-contractual liabilities, such as those arising from non-formalized or legal obligations, are reached by the present value adjustment;

What is the appropriate discount rate for an asset or liability and what care is needed to avoid distortions of computation and bias;

What is the recommended discount (interest) allocation method;

If the present value adjustment should be effective net of tax effects.