Verification of valuation – concept and applicability

According to the assets valuation standards, "The verification of a valuation is the process of drawing up an opinion on how it is drawn up, as well as the communication of that opinion, a process which is materialised by a written report". Based on this definition, the FairValue team has developed both the external verification service, which can be translated into a verification report, and an internal procedure for verifying valuation reports carried out by the company's valuators, which results in an additional objective analysis carried out by an experienced valuator on the reasoning applied in a valuation report conducted by a colleague within the company.

External applicability:

Verification of anevaluation report, according to evaluation standards, by an authorised valuator specialising in the Valuation Verification (VE), proven with the verifier's stamp, materialised by a verification report, with a simple or extended objective.

Internal applicability:  

What, who, when, how and why is it analyzed? Some basic questions that can provide, through their answers, a picture of an internal check:

What?

· The documents underlying the preparation of the valuation report;

· Data used in estimating values;

· Terms of reference used in the preparation of the report;

· Methods and approaches applied;

· The reasoning applied by the valuator on the entire valuation process.

Who?

· A team member, usually a valuator with experience and competence in the specific field of the valuation (real estate, movable property, business).

When?

· The role of the internal verifier appears in the last stage of the valuation process, before the valuation report is handed over to the client or user.

How?

· The intervention of the verifier shall be materialised through a constant dialogue with the person who drew up the report, shall clarify any aspect which may have influenced the estimated value, confirm the adequacy of the approaches applied and the accuracy of the results obtained.

Why?

· We have always considered that subjecting the valuation process to an additional filter leads to an objective result, an adequate estimate of the value and an increased quality of the valuation report.

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