Financial Reporting Valuations in Sydney: AASB 13
Monita prepares fair value valuations for AASB 13 financial reporting of property, plant and equipment.
What AASB 13 Fair Value Requires
AASB 13 / IFRS 13 sets out how fair value is measured for financial reporting: the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Monita prepares fair value valuations that follow this standard, with clear reports for auditors.
Who Needs One?
CFOs, auditors and listed/private companies.
- Property, plant & equipment
- Investment property
- Tangible assets
- Business combinations
Financial Reporting Valuations in Sydney
Monita prepares independent fair value valuations for Sydney companies, groups and not-for-profits that report assets in their financial statements. Our office is at 1/261 George Street, Sydney, and the work is led by a Certified Practising Valuer (Property) and a Certified Practising Valuer (Plant & Machinery).
We value; your auditor decides the accounting treatment. We set out the basis of value, the inputs and the assumptions clearly, so your finance team and auditor can review them and decide how the figure is used in the accounts.
AASB 13 Fair Value Measurement: A Short Summary
AASB 13 (also written AASB13) is the Australian version of IFRS 13. It defines fair value as an exit price: the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. The entity's own plans for the asset do not change that price.
The standard ranks the inputs used in a valuation in three levels. Level 1 is unadjusted quoted prices in active markets for identical assets. Level 2 is other observable inputs. Level 3 is unobservable inputs, which need more judgement and more disclosure.
For non-financial assets, fair value assumes the highest and best use a market participant would make of the asset. That use must be physically possible, legally permissible and financially feasible. Valuers apply a market, cost or income approach, or a mix, depending on the asset.
Assets We Value for Financial Reporting
We value tangible assets across property, plant and equipment, so values can be reported at fair value where your accounting policy or the standard requires it.
- Land and buildings, including owner-occupied property
- Investment property, where the fair value model is used
- Plant, machinery and equipment
- Specialised and purpose-built assets
- Assets and liabilities acquired in a business combination (see our purchase price allocation service)
When a Fair Value Valuation Is Needed
Companies that report assets at fair value, or that revalue a class of property, plant and equipment, commonly need an independent valuation. Investment property is one case: an entity chooses either the fair value model or the cost model, and under the fair value model the property is remeasured at each reporting date. Auditors often ask for supporting evidence for a fair value figure.
Whether you revalue, how often, and how any change is recorded are accounting decisions. Speak to your accountant or auditor about your policy before you instruct us.
How the Work Runs
We agree the assets, the measurement date and the reporting purpose first, and ask who will review the report. We then inspect where needed, value each asset class, and document the inputs and assumptions.
Where assets are valued every year or every few years, we keep the approach consistent so changes in value can be explained to the auditor. The timeline is agreed at the start, based on the number and location of assets. Property work is generally delivered in 5 to 10 business days.
Information We Need From You
To start, send us the asset register or list of assets, the measurement date, the accounting standard or policy that applies, the previous valuation report if there is one, and the name of your auditor. Requirements differ between auditors and reporting frameworks, so tell us who will receive the report.
How a Monita Valuation Works
Free consultation
We talk through the purpose, the valuation date and what the report is for.
Scope and fee
You get a firm fee estimate and a delivery date before any work begins.
Valuation
We gather the evidence, inspect where needed and apply the method that suits the purpose.
Report
A clear report setting out the basis, the evidence and the reasoning, ready for your adviser, lender or auditor.
Financial Reporting Valuation FAQs
What is a valuation for financial reporting?
It is an independent valuation of assets for the financial statements, for example the revaluation of property, plant and equipment or the fair value of investment property. It is prepared on the basis that applies, commonly AASB 13, and sets out the inputs and assumptions so an auditor can review them.
What is AASB 13 fair value?
AASB 13 defines fair value as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. It is an exit price, based on market participant assumptions rather than the owner's intentions. AASB 13 incorporates IFRS 13.
What are the three levels of the fair value hierarchy?
Level 1 is unadjusted quoted prices in active markets for identical assets. Level 2 is other observable inputs, such as prices for similar assets. Level 3 is unobservable inputs. A measurement is categorised by the lowest level input that is significant to it, and Level 3 needs more disclosure.
What is the difference between fair value and market value?
Both reflect a price between willing parties, but fair value is an accounting measure defined by the standard, while market value is a valuation term. For property the two are often close. Fair value can also differ because it follows the standard's rules, such as highest and best use.
Which assets are valued for financial reporting?
Property, plant and equipment, investment property, other tangible assets, and assets acquired in business combinations. Which assets are carried at fair value depends on your accounting policy and the standards that apply to your entity, so confirm with your accountant.
Will my auditor accept the report?
We prepare the report for the stated reporting purpose and set out the basis of value, inputs and assumptions so it can be reviewed. We cannot promise acceptance. Your auditor decides what evidence is sufficient, and requirements differ, so tell us who will receive it and speak to them early.
How often do assets need to be revalued?
It depends on your accounting policy and how much values move. Some entities revalue every year, others every few years with checks in between. This is an accounting decision, so your accountant or auditor should advise on the frequency before you commission the valuation.
What is the difference between a revaluation and an impairment test?
A revaluation updates an asset to fair value under your accounting policy. An impairment test checks whether the carrying amount is higher than the amount recoverable, for example from the asset or the cash-generating unit it belongs to. They have different purposes. Your accountant advises which applies.
Do you value investment property for the accounts?
Yes. Where an entity uses the fair value model for investment property, the property is remeasured at each reporting date. We value investment property in Sydney for that purpose. Your accountant decides whether the fair value or cost model is your policy.
Can you value plant and equipment as well as property?
Yes. We value land, buildings, plant, machinery and equipment in one engagement and report each class separately. Property and plant are valued by the relevant Certified Practising Valuer, so the work stays with a specialist for each asset type.
What do you need to start a financial reporting valuation?
The asset list or register, the measurement date, the accounting policy or standard that applies, any previous valuation, and your auditor's name. Tell us who will receive the report and what they need. We agree the scope and timeline at the start.
How long does a financial reporting valuation take?
The timeline is agreed at the start because it depends on the number, type and location of assets and on inspections. Property work is generally delivered in 5 to 10 business days. Larger portfolios or plant-heavy engagements are scoped individually, so tell us your reporting deadline early.
Ready for a precise, independent valuation?
Connect with the Monita Asset Management team. All consultations are free of charge.
- Free initial consultation
- Fee confirmed before any work begins
- Certified Practising Valuer, Sydney CBD office