REPORT WRITING

Introduction
The valuer receives instructions from the client to carry out valuation of land and
building. The valuer performs his duty as per the Terms of Reference and estimates
value.

Right from taking instructions from client, inspecting the property, collecting data,
analyzing data and estimating value, whatever he has done is to be reported in
writing.

While writing valuation reports valuer has to keep in mind that the report – like
painting, sculpture, or architecture – is an art form. It should be pleasing in
appearance and precise in content. It should take the reader by the hand and lead
him along the line of thought adopted by the writer toward the goal of a
convincing conclusion. Along the way, the reader should find satisfaction,
education, and evidence of skillful use of knowledge. In addition, the report should
be professional in design, logical in reasoning, and completely convincing in text.
A valuation. report is one of the technical reports
based on which a user of report takes his financial
decisions concerning his property. It is, therefore,
necessary to acquire and develop the skill of
expressing facts and opinion in the best possible
manner. A valuation report should not be in
ambiguous words, which may confuse the user of
the report in taking his decision.
The valuation reports of property are prepared for
various fiscal; and non-fiscal purposes. Where by
the user normally desire to know market value of
his property,say for purchase or sale, etc.
 GENERAL STRUCTURE AND PROCESS OF
REPORT WRITING
The terms of engagement

 An order should be accepted by a valuer from a client or prospective

client in writing and, at a minimum description of the property to be
valued.
 Identification of the client : that should include the name address and
other identification. In considering the disclosures it is necessary to
identify the ‘client’
 The purpose of the valuation : The purpose like to determine Capital
gains, Market Value, Mortgage lending value etc. to be declared.
 The subject of the valuation : The list of properties if number of
properties are there to evaluate.
 The interest to be valued : Always to be kept in valuers mind that
ownership or interest in the property that is being valued. A valuer
should agree with the client the interest(s) to be valued.
 The type of property and how it is used, or classified, by the client
Example
freehold or leasehold;
owner-occupied;
held as an investment;
specialised property; and
property held for specified purposes (mineral-bearing land etc.)
 Identification of the property : The property should be identified by the
client or client's authorised persons. This is not only the valuers duty to
identify the property.
 Documents produced by the client should be authenticated by the client
or clients.
 It is client's duty to produce the This is not only the valuers duty to see the
authenticity of the property.
 A statement of the status of the valuer, sometime required to appoint a
valuer.
 The appropriate currency to be adopted if required.
 Any assumptions, special assumptions, reservations, special instructions to
be included in the terms.
 The extension of investigation by the valuer to be included in the term.
 The basis on which the fee will be calculated
 Minimum content of Valuation Reports

The Report must deal with all the matters agreed between the client
and the valuer in the Terms of Engagement and include the following
minimum Information, except where the Report is to be provided on a
form supplied by the client:

(a) identification of the client;

(b) the purpose of the valuation;
(c) the subject of the valuation;
(d) the interest to be valued;
(e) the type of property and how it is used, or classified, by the client;
(f) the basis or bases of valuation;
(g) the date of valuation;
(h) the status of the valuer and disclosure of any previous involvement;
(i) where appropriate, the currency that has been adopted;
(j) any Assumptions, Special Assumptions, reservations, any special
instructions
or Departures;
(k) the extent of the valuer’s investigations;
(l) the nature and source of information to be relied on by the valuer;
(m) any consent to, or restrictions on, publication;
(n) any limits or exclusion of liabilities to parties other than the client;
(o) confirmation that the valuation accords with these standards;
(p) the opinions of value in figures and words;
(q) signature and date of the Report
(r) Notes
(s) Annexures
(t) Certificate
Identification of the client
The Report must be addressed to the client, or the
client’s representatives. The source of the instructions
and the identity of the client must be stated, if different
from the addressee.

The purpose of the valuation

The purpose of the valuation must be stated clearly and
unambiguously. Where the purpose is not disclosed the
Report must include an appropriate statement

The subject of the valuation

Where a number of properties are valued it may be
convenient to list them in a schedule that identifies each
unit of valuation.
The interest to be valued
The legal interest in each property should be stated. The
extent to which vacant possession is, or may be,
available, if required, should also be noted.

The type of property and how it is used, or classified, by

the client.
For some purposes the uses, categories, or classes of
property will have been agreed with the client. Where
formal agreement is not required it is recommended that
the Report contain a brief description of these matters.

The Basis, or Bases, of the Valuation

The Basis of Valuation must be stated and the definition
must be provided in full.
The date of valuation
The date of valuation must be stated. If there has been a material change in
market conditions, or the circumstances of a property or portfolio, between
an earlier date of valuation and the date of the report, the member must
draw attention to this.
It may also be prudent for the member to draw the client’s attention to the
fact that values change over time, and that a valuation given on a particular
date may not be valid on an earlier or later date.

The status of the member and disclosure of any previous involvement.

Members must state whether they have acted as Internal, external or
Independent Valuers. If the member has undertaken the valuation as an
Independent Valuer then the specific criteria and confirmation that the
member complies with this status must be confirmed. Where Disclosures
have been made these should be recorded.

The Currency in which valuation has been done

If some valuations have been translated into a currency other than that of the
country in which the property is located, the exchange rate adopted, and its
source, is to be noted.
Any Assumptions, Special Assumptions, reservations, any special
instructions or Departures.
All Assumptions made must be stated, together with any reservations that
may be required. Special Assumptions must be clearly stated.
Where the valuation is undertaken on the basis of restricted information, or is
a revaluation without an inspection, the Report must include full particulars
of the restriction.
A statement must be made as to whether or not any allowance has been
made for liability for taxation which may arise on disposal, whether actual or
notional, and whether or not the valuation reflects costs of acquisition or
realization.

The extent of the member’s investigations

The Report must record that date and extent of the inspection, including
reference to any part of the property to which access was not possible. The
valuer must make it clear if the valuation has been made without an
opportunity to carry out an adequate inspection.
In the case of a revaluation, the Report should also refer to any agreement
that further inspections are unnecessary.
Where a substantial number of properties are being valued, a generalized
statement of these aspects is acceptable, provided that it is not misleading.
The nature and source of information to be relied on by the member.
The valuer must make it clear if the valuation has been carried out without the
information normally available when carrying out a valuation.
The valuer must indicate in the Report if (where practicable) verification is needed on
any information or Assumptions on which the valuation is based, or if information
considered material has not been provided.
If any such information or Assumption is material to the amount of the valuation, the
valuer must make clear that this valuation should not be relied on, pending
verification.
In the case of a revaluation, a statement of any material changes advised by the client,
or a stated Assumption that there have been no material change, should be included.
Valuers should also include any additional information that has been available to, or
established by, them that they believe to be crucial to the client’s ability to understand
and benefit from the valuation, with regard to the purpose for which it has been
prepared.

Any consent to, or restrictions on, publication.

Where a statement for inclusion in a publication is required this should be provided as
a separate document, which may be annexed to the Report.
Where the valuer has either provided a valuation on the basis of a Special Assumption,
or made a Departure from any of the Practice Statements in these Standards, a
statement must be included that no reference is to be made to the Report in any
published document without an adequate contemporaneous reference to the Special
Assumption or Departure.
Any limits or exclusion for liability to parties other than the client.
For some purposes valuers may be unable to exclude liability to third
parties.
Any limitation on disclosure of a valuation based on restricted
information or instructions should be included.

Confirmation that the valuation accords with the standards.

The valuer has to state which standards he has followed for the
assignment.

The opinions of value in figures and words.

In the main body of the Report the opinion of value is required in
words, as well as in figures.

Signature and date of the Report.

The Report must be signed by the person who accepts responsibility
for it.
QUALITIES OF GOOD REPORT

 Report should be like painting, Sculpture or Architecture –

art Form
 Pleasing in Appearance
 Orderly and organized
 Continuity
 Properly arranged
 Definite and concise
 Report on valuation is always written in a simple language like an essay for easy
understanding to a non-professional. It should be able to create interest in the
mind of a reader to read it from the beginning to the end, like reading a story or a
novel. It is, therefore, necessary that a report should have certain specific qualities.

Qualities of a Report on Valuation

(a) Orderly and organized
The report should be orderly and organized. This implies that before writing a
report, an order in which following points shall be incorporated, should be
decided:
• information and data/facts,
• findings, and
• conclusion.
The order must follow:
• a definite,
• systematic, and
• logical sequence.
The information and data/facts, and findings must then be described in a series of
paragraphs and each paragraph needs to be independent and yet logically
following the earlier paragraph. Conclusion shall be given at the end.
(b) Continuity
In order to maintain continuity of a report while reading, no break should be felt
between any of the parts of the whole report. It is, therefore, necessary that schedules,
statements, and such other information should not form part of the main body of the
report, but instead be attached to the report as appendices/annexures. The executives
referring the report are generally not interested in such statements and in case if they
are interested, the same can be referred in appendices/annexures.

(c) Properly arranged

A report should be arranged in such a manner that a client can easily refer to any
particular part of report without any difficulty. Headings and sub-headings to
paragraphs should be given in such a way that a reader can visualize what it contains.

(d) Definite and concise

The report should be brief and to the point. The length of the report should just be
required to convey forcefully the information, facts, and opinion with reasoning. It
should not be too long or too short, than required. The ambiguity has no place
anywhere in the report. The words, sentences and paragraphs should be such as to
convey maximum meaning in minimum use of words.
It is to be borne in mind by the valuer that while performing his duty he shall:
 Completely and understandably set forth the valuation in a manner that will be not be
misleading.
 Provide sufficient information to fully understand its data, reasoning, analyses,
assumption and limiting conditions.

The services of valuers are mainly required for following fiscal and non-fiscal purposes:
Fiscal purposes
 Levy of Taxes such as:
 Municipal Taxes on Land and Buildings collected by Local Self Government.
 Stamp Duty collected by State Governments on documents for transfer of properties.
 Income-Tax / Capital Gains.
 Any other purpose not referred above.
Non-fiscal purposes

 Award of compensation for compulsory acquisition of property for public

purposes.
 Computation of betterment levies under town planning laws.
 Valuation of tangible assets owned by the Govt. of India, State Governments,
Public Sector undertakings and statutory bodies like port trusts, for privatization
as well as ascertaining return on investment/current value.
 Liquidation of assets for recovery for settlement of financial disputes by
Commissioner, High Courts and Official Liquidator.
 Computation of rent at the time of leasing of property and subsequent renewal
of leases in Government/Semi Government organization, as also while fixing
mesne profits by courts of law.
 Grant and recovery of loans and advances by Banks.
 Insurance of immovable and movable property.
 Any other purpose not referred above.