Nobody cares about asset valuations


By Chris Brain, Senior Construction and Property Advisor, CIPFA Property

In some local authorities the asset valuations make no difference to how an authority manages or operates its assets. But they should. 

Asset valuations have become a regular and familiar part of close down for over 20 years now, but how many finance directors can truly say they have ever looked at the valuations and considered what they mean? For many the whole process can be a bit of a chore. 

The accountants just want some numbers to put in the balance sheet, at the lowest possible cost. So long as they are handed over on time and are not that different from last year, then they know audit will be happy, which makes them happy. 

If you have an external valuer, they are doing the job for a fee – and quite possibly a ridiculously low fee at that – and so want to spend as little time as possible on it or they will lose money.

For the busy in-house valuer who has ‘real work’ to do, it can also be regarded as a chore compared with managing the property estate and delivering on revenue income and capital receipt targets.

Why should we think differently about asset valuations?

There is a widespread urban myth that asset valuations are of no practical value. But this is – or should be – far from the truth of the matter. The valuations themselves provide tangible benefits. For operational assets, the following is true: 

  • The depreciation gives us a picture of the rate that the assets are wearing out at, which should help with capital planning and strategy, as well as asset management strategy and building lifecycle planning. 
  • They give us a capital value from which a revenue charge for services to occupy assets may be calculated. This can be used to analyse relative use of resources by different services and enable the organisation to make decisions based on efficiency and economy. 
  • Where provided by the valuer, alternative ‘market value’ figures can reveal asset management opportunities to re-provide the asset while delivering improved accommodation, reduced running costs and perhaps even with capital receipts left over. 

For investment property, the asset valuations: 

  • give us the rate of return in revenue, which we can compare with other council investments
  • tell us what capital growth we are obtaining if linked to treasury management activity
  • help us to make investment and disinvestment decisions. 

Don't believe the urban myth 

So the next time you think to yourself that asset valuations do not matter, think again. Take a closer look at what they mean and start using the valuable information they provide and the good resource decision-making they can lead to. 

CIPFA Property offers a wealth of insight and support for asset management. If you or your finance team wish to discuss valuing assets and require help or guidance, then please contact us at E: or find out more on our website W: 

  • CIPFA's support in this area includes our new Certificate in Asset Valuation course starting 4 May (London), 5 May (Leeds) and 1 June (Cardiff). Plus a new book is published in July, Property Asset Valuation: A Handbook for Property and Finance Professionals in Local Authorities, available to pre-order now