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Types of Value in Civil Engineering - Civil Engineering Notes
Types of Value in Civil Engineering - Civil Engineering Notes
Value is nothing but the worth or utility of certain building, property, machinery,
equipment, etc. Value always changes from time to time and always depend upon
supply and demand. The value of the property within short time may be more than its
existing worth or price. There are many types of values which are used while Estimating
and Costing of certain thing.
3. Market Value :
The market value of the property is the amount which can be obtained at any particular
time from open market if property is put on for sale. Market Value may differ from time
to time according to demand and supply. The Market Value also changes from time to
time for various miscellaneous reasons such as change in industry, change of fashion,
cost of labours and materials, cost of transportation etc.
4. Book Value :
Book Value is the amount shown in the account book after allowing the necessary
depreciation. The Book Value of the property at a particular year is original cost minus
the amount of depreciation upto previous year. The Book Value depends upon the
amount of depreciation allowed per year and will gradually increase year to year and at
the end of utility period of property the Book Value will be only Scrap Value.
5. Potential Value :
When the property is capable of fetching more return due to it’s alternative use or by
advantageous planning or providing development works then that value of property is
called as Potential Value.
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6. Sentimental Value :
When the property is sold or purchased at the higher value than the market value due to
sentiments of the owner or the purchaser of the property is called as Sentimental
Value. The main causes for Sentimental value are as follows :
The owner may be very much attached to the property so he/she shall demand
fancy price.
The situation and the class of the property may suit a particular prospective
purchaser which may be ideal for his/her purpose and may have special value to
him/her.
If the property is put on for sale and 2 prospective purchasers are determined to
outbid then definitely the value of that property will reach higher than the
existing market value.
7. Speculation Value :
When the property is purchased so as to sell the same at profit after some duration, the
price paid is known as Speculation Value. For example, If Government is planning for
some project or construction of new road or expansion on existing road from a
particular area then that area gains more value from actual and market value and the
speculators always buys such property low cost and sell it again after some duration.
The value at which he purchases the property is called as Speculation Value.
8. Distress Value :
If the property is sold at lower price than that which can be obtained for it in open
market is called as Distress Value. This may be due to various reasons which are
mentioned below.
Financial crisis for vendor due to which he/she sells the shop or property at very
low price.
Panic due to Riots, Earthquake etc.
Quarrel among the partners.
Sentimental reasons.
9. Accomodation Value :
Small strips or land cannot be developed independently due to their restricted length,
depth and number of purchasers of such property are very less. This strips can only be
sold to the adjacent land owners who may be offering only low price. This value is
called as Accomodation Value.