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.
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:
For investment property, the asset valuations:
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: firstname.lastname@example.org or find out more on our website W: www.cipfa.org/property.