Revaluation of Investment Properties - FRSSE

Revaluation of Investment Properties - FRSSE

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Basically same question as someone else's previous unanswered thread found on AW and given that I am about to take on a property co, I am hoping someone might be able to clarify position:

Small co exempt from audit with number of investment properties - under FRSSE do we have to get a professional valuation every year, or is it acceptable for the directors to estimate the value, provided that we disclose in the notes that the property was valued by the directors?

And is there some recommended/suggested voluntary practice of having professional valuation undertaken every 3 or 5 years for instance and directors valuations in between?

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By Chris Smail
23rd Jul 2010 10:54

FRSSE is on ASB website

Here

 

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By DMGbus
23rd Jul 2010 13:57

Revaluation - unnecessary expense

Small company accounts are all about what the directors want, within certain  constraints.

So, if the directors decide to NOT waste money on professional valuers that's good (unless they have to supply accounts to lenders when I'd say "needs must").

In fact no need to revalue the properties at all if they don't want to, unless on the commonsense principle (which should override FRSSE and other OTT rules) the properties are worth less than their Balance Sheet value in which case the "true and fair" principle ("Commonsense") would require a write down.

None of the property owning companies that I know bother with revaluations UNLESS they wish to borrow more money.  They don't depreciate their properties either under the "Commonsense override" principle.

 

 

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By James Hellyer
28th Jul 2010 10:24

Perhaps...

... these shouldn't revalue their properties at all if they aren't willing to follow the rules.

The correct answer is that the properties should be revalued at least once every five years "by an experienced valuer". In the interim it should be revalued by an experienced valuer if it's likely there has been a material change in value.

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By peter4lc
18th May 2014 13:53

Experienced valuers

Just picked the last post up - the requirement for experienced valuers is in 6.24 of the FRSSE and refers to tangible fixed assets other than investment property. The question here was about investment property.

The FRSSE has no requirements for a professional or even experienced valuer for investment properties but does require a disclosure of the names of the persons making the valuation, or particulars of their qualifications, and the bases of the valuation. If the valuer is an officer or employee, this should be disclosed.

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