Valuation activities are professional activities on establishment of the value of tangible objects and immaterial goods, taking into account rights for them and interests regarding them of the persons at civil law.
Valuation is a mode of expression in money measure of presence and movement of the enterprise assets (property). The purpose of valuation is consolidation of information on diverse business processes and economic phenomena that occur in the enterprise.
Main types of valuation:
- actual cost (“original cost” is used for fixed assets) is a complex of costs incurred while acquiring or creation (production) of the asset;
- residual book value of fixed and intangible assets is the difference between original cost of fixed and intangible assets and depreciation charges;
- fair value is the amount by which can be made exchange of asset or payment of liability as a result of operation between informed, related and independent parties;
- net realizable value of stocks is the expected price of the stocks selling excluding prospective expenditures for completion of their production and selling;
- net realizable value of receivables is the difference between the amount of current receivables (original cost) and the amount of reserves for doubtful debts;
- revalued price of fixed and intangible assets is the original and residue cost of fixed and intangible assets after their revaluation (multiplication on the revaluation index).
Valuation of the most important types of assets as of balance sheet date:
- fixed and intangible assets are presented in two values according to original cost, residual cost and market value;
- production stocks, work in process and final products are presented at the lowest of two values: actual cost or net realizable value;
- receivables for products are presented at two values: initial cost and net realizable value.
Main types of valuation regarding the object are: