Professional Practice I

VALUATION
Class 2

Ar. Kalpeshkumar Patel

 VALUATION
Example : 1
Prepare Valuation Report for a building having built up area of 250 Sqm in a 150 Sqm
Site. The building is 12 years consider 10 % Depreciation for building every 4 years…
Assume
Land Cost as Rs – 25,000/- per Sqm
Cost of Construction as Rs – 17,500/- Sqm
Value of Land = Site Area x Land Cost per Sqm

= 150 Sqm x Rs. 25,000 per Sqm

Value of Land = Rs. 37,50,000/-

Cost of Building = Building Built Up Area x Cost of Construction per Sqm

= 250 Sqm x Rs. 17,500 per Sqm
Cost of Building = Rs. 43,75,000/-

Depreciation is 10% every 4 years…

Building Age = 12years
Depreciation Intervals – 12years / 4 years = 3 Intervals
 VALUATION
Cost of Building = Rs. 43,75,000/-
Cost After 4 years or First Interval = Cost of Building – Cost of Building x 10 % Depreciation
= Rs. 43,75, 000 – Rs. 43,75, 000 x 10 %
= Rs. 43,75, 000 – Rs. 4,37,500
= Rs. 39,37,500/-

Cost of Building after first interval or 4 years = Rs. 39,37,500/-

Cost After 8 years or Second Interval = Cost of Building – Cost of Building x 10 % Depreciation
= Rs. 39,37,500 – Rs. 39,37,500 x 10 %
= Rs. 39,37,500 – Rs. 3,93,750
= Rs. 35,43,750/-

Cost of Building after Second interval or 8 years = Rs. 35,43,750/-

Cost After 12 years or Third Interval = Cost of Building – Cost of Building x 10 % Depreciation
= Rs. 35,43,750 – Rs. 35,43,750 x 10 %
= Rs. 35,43,750 – Rs. 3,54,375
= Rs. 31,89,375/-

Cost of Building after Third interval or 12 years = Rs. 31,89,375/-

 VALUATION
Total Value of the Property = Land Value + Cost of Building after Depreciation

Value of Land = Rs. 37,50,000/-

Cost of Building after Depreciation = Rs. 31,89,375/-

Total Value of the Property = Land Value + Cost of Building after Depreciation

Total Value of the Property = Rs. 37,50,000/- + Rs. 31,89,375/-

Total Value of the Property = Rs. 69,39,375 /-

(In Words - Rupees Sixty Nine Lakhs, Thirty Nine, Three Hundred and Seventy Five)
Example : 2
VALUATION
Prepare Valuation Report for a Flat in a Four Storeyed Building. There are 16 flats in the
building. Flat has built up area of 140 Sqm in a 600 Sqm Site. The building is 10 years
consider 10 % Depreciation for building every 5 years… All Flats have undivided equal
share
Assume
Land Cost as Rs – 20,000/- per Sqm
Cost of Construction as Rs – 12,000/- Sqm
Total Value of Land = Site Area x Land Cost per Sqm
= 600 Sqm x Rs. 20,000 per Sqm

Total Value of Land = Rs. 1,20,00,000/-

Land Value share for the Said Flat = Total Value of Land / 16 Flats
= 1,20,00,000 / 16 Flats
Land Value share for the Said Flat = Rs. 7,50,000/ -

Cost of Construction of Flat = Flat Built Up Area x Cost of Construction per Sqm
Cost of Construction of Flat = 140 Sqm x Rs. 12,000 per Sqm
Cost of Construction of Flat = Rs. 16,80,000
 VALUATION
Depreciation is 10% every 5 years…
Building Age = 10 years
Depreciation Intervals – 10years / 2 years = 2 Intervals

Cost of Construction of Flat = Rs. 16,80,000/-

Cost After 5 years or First Interval = Cost of Building – Cost of Building x 10 % Depreciation
= Rs. 16,80,000 – Rs. 16,80,000 x 10 %
= Rs. 16,80,000 – Rs. 1,68,000
= Rs. 15,12,000/-

Cost of Building after first interval or 5 years = Rs. 15,12,000 /-

Cost After 10 years or Second Interval = Cost of Building – Cost of Building x 10 % Depreciation
= Rs. 15,12,000 – Rs. 15,12,000 x 10 %
= Rs. 15,12,000 – Rs. 1,51,200
= Rs. 13,60,800 /-
Cost of Building after Second interval or 10 years = Rs. 13,60,800 /-
 VALUATION
Total Value of the Property = Land Value + Cost of Building after Depreciation

Value of Land = Rs. 7,50,000 /-

Cost of Construction after Depreciation = Rs. 13,60,800 /-

Total Value of the Flat = Land Value + Cost of Construction after Depreciation

Total Value of the Flat= Rs. 7,50,000/- + Rs. 13,60,800 /-

Total Value of the Flat = Rs. 21,10,800 /-

(In Words - Rupees Twenty One Lakhs, Ten Thousand and Eight Hundred Only)
Thank You