Data, Analysis, and Report Writing
This domain tests evidence quality, the distinction between assumptions and special assumptions, and whether your report would survive scrutiny by a reader who never met you.
Inputs and evidence
- IVS requires inputs that are sufficient, verifiable where possible, and consistent with the selected basis of value. Record the source, date and reliability of each significant input.
- Typical sources: inspection notes, asset registers with serial numbers, maintenance and utilisation records, audited financial statements, leases, transaction databases, published indices and planning records.
- An assumption is a fact that is reasonably capable of being correct but has not been verified. A special assumption is one adopted as true even though it may not be, and it must be identified and justified.
Reporting content
- IVS 103 requires identification of the client and other intended users, purpose, asset, basis of value, valuation date, extent of investigation and any limitations, assumptions and special assumptions, methods and key inputs, the conclusion with reasoning, restrictions on use, and the valuer's compliance statement and qualifications.
- Distinguish the valuation date from the report date and disclose subsequent events that would change the view.
- Present sensitivity on the two or three inputs that actually move value: capitalisation rate, discount rate, commodity price, throughput or absorption.
Worked example
Two comparables for a light-industrial unit. Comparable A sold at $1.05M three months ago after 90 days of open marketing between unrelated parties. Comparable B recorded $1.35M between related parties, off-market, with no marketing period. Reasoning: B fails the arm's-length and proper-marketing tests within the definition of market value, so exclude it or treat it purely as an upper bound. Adjust A for market movement using a cited index, say 2%, giving about $1.071M, then adjust for size or condition if required. Disclose the exclusion of B and name the index used.
Traps
- Reporting a point estimate with no commentary on uncertainty or key sensitivities.
- Omitting restrictions on use and reliance, then having the report relied on by a third party.
- Confusing the report date with the valuation date in the transmittal letter.
- Labelling an unverified fact as a special assumption, or a special assumption as fact.