definition of valuation

Valuation is the practice of assigning economic value to a good or service with the purpose of locating it in the buying and selling market.

For finance and the economy, valuation or appraisal is considered to be the contemplation of various indicators in particular to determine the final value of a product or good of any kind and, thus, enable its exchange in economic operations.

One type of valuation is urban planning that seeks to value real estate-type assets and rights, often in order to distribute the costs equitably among the participants or owners in a case of transformation or similar. There are different valuation methods in these cases, such as the comparison method (of similar assets), the capitalization method (in terms of the net return produced by the property), the cadastral value (the cadastre appraisal in accordance with the regulations). public), and the residual value of the land.

We speak of appraisal in cases in which an owner wishes to sell a real property and wants to receive an official estimate of its value as a reference parameter for potential buyers. These appraisals usually consider criteria of location, size, conditions and other indicators.

The term appraisal is also commonly used for the purpose of determining the value of objects such as works of art, jewelry, collectibles, vehicles and others. Appraisals of objects can occur so that the owner of the same can exchange them for money in exchange houses. But they also take place very frequently when it comes to unique and exclusive pieces that will be put up for auction and the valuation is then necessary to determine a base price at the auction that will be increased (or not) by interested buyers.

The valuation or appraisal, although it works with different methodologies, usually contains a quota of subjectivity or social value for the determination of the final cost.

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