CE2402 ESTIMATION AND QUANTITY SURVEYING UNIT IV / VALUATION (FOR VII – SEMESTER) : CE2402 ESTIMATION AND QUANTITY SURVEYING UNIT IV / VALUATION (FOR VII – SEMESTER) Prepared by C.MAKENDRAN CIVIL ENGINEERING. Define valuation : Define valuation Valuation is the process of estimating the cost of a property based on its present condition. The properties may be immovable properties like land, buildings, mines trees quarries etc., and movable properties such as coal, oil, steel, cement, sand etc. What are the important factors influencing the value of building? : What are the important factors influencing the value of building? 1. Type of the building 2. Location of the building 3. Expected life of the building 4. Size and shape of the building 5. The Present condition of the building 6. Legal control of the building Explain the different six methods of valuation. : Explain the different six methods of valuation. Rental method Direct comparison with capital value Valuation based on profit Valuation based on cost Depreciation method of valuation Development method of valuation Write the various methods of depreciation: Write the various methods of depreciation 1. Straight line method 2.Constant percentage basis 3.Quantity survey method 4. Sinking fund method. Define the following terms (i) Market value (ii) Book value : Define the following terms ( i ) Market value (ii) Book value ( i ) Market value: The market value of a property is the amount, which can be obtained at any particular time from the open market if the property is put for sale. The market value will differ from time to time according to demand and supply. (ii) Book value: Book value is the amount shown in the account book after allowing necessary depreciations. The book value of a property at a particularly year is the original cost minus the amount of depreciation up to the previous year. Define the following terms (i) Scrap Value (ii) Salvage value (iii) Capitalized value : Define the following terms ( i ) Scrap Value (ii) Salvage value (iii) Capitalized value Scrap Value: If a building is to be dismantled after the period its utility is over, some amount can be fetched from the sale of old materials. The amount is known as scrap value of a building. If various from 7% to 10% of the cost of construction according to the availability of the material Salvage value: if a property after being discarded at the end of the utility period is sold without being into pieces, the amount thus realized by sale is known as its salvage value. Capitalized value : It is defined as that amount of money whose annual interest at the highest prevailing rate will be equal to the net income received from the property. To calculate the capitalized value, it is necessary to know highest prevailing on such properties and income from the property. Write the necessity of valuation. : Write the necessity of valuation. Rent fixation. It is generally taken as 6% of the valuation of the property For buying and selling Acquisition of property by Govt. To be mortgaged with bank or any other society to raise loan For various taxes to be given and fixed, by the Municipal Committee Insurance: For taking out on insurance policies. What is the purpose of valuations? : What is the purpose of valuations? 1. For assessment of wealth tax, property tax etc 2. For fixation of rent 3. For security of loans or mortgage 4. For insurance, betterment charges etc 5. For compulsory acquisition 6. For reinstatement.