Tangible Asset Valuation
Our valuation service is designed to determine the current market value (fair value) of tangible assets, including real estate and real estate-related rights and benefits, in accordance with Turkey Accounting Standard 16 (TMS 16).
Tangible assets are long-term assets purchased that are not intended to be converted into cash within a year, such as buildings, vehicles, production machinery, office desks, and other physical items.
In our accounting system, tangible assets are recorded under the following categories:
- 250 Land and Plots
- 251 Subsurface and Surface Structures
- 252 Buildings
- 253 Facilities, Machinery, and Equipment
- 254 Vehicles
- 255 Fixtures
- 256 Other Tangible Assets
- 257 Accumulated Depreciation (-)
- 258 Ongoing Investments
- 259 Advances Given
Accounts 257, 258, and 259 are not included in the valuation of tangible assets, but the records held in these accounts, particularly for ongoing projects, are used in our valuation processes.
When tangible assets are purchased, they are initially accounted for at cost, according to the cost principle. The VAT amount is not included in the cost. As per the principle of periodicity, valuation reports need to be prepared at the year-end closing or for quarterly periods.
In line with accounting standards, the revaluation method is used to determine the fair value of tangible assets. Fair value is defined as the amount that would be agreed upon between knowledgeable and willing parties in an arm’s-length transaction, where an asset is transferred or a liability is settled. It is crucial for the market conditions to be normal when determining fair value.
In our valuation processes, we apply the comparative market, cost, and income approaches as defined by international valuation standards. The approach used may vary depending on the asset type, but typically at least one of these approaches is used to determine the value.
Depending on the diversity of tangible assets, different SPK-licensed valuation experts are involved in preparing the reports. For example, for land and plot valuations, a survey engineer or urban planner may be involved, while for qualified buildings, a civil engineer or architect would be prioritized. For machinery and equipment valuations, experts in the relevant field, such as mechanical engineers, are tasked with preparing the valuation reports. These reports are reviewed by our auditors, each with a minimum of five years of experience, before being presented to our clients.
The prepared valuation reports are grouped under Tangible Asset Valuation Reports, which are hybrid valuation reports created by various disciplines, and are integrated into our accounting system.
