Property Institute Releases New Valuation Standard
3 April 2002
The New Zealand Valuation and Property Standards Board, the standards setting board of the New Zealand Property Institute (NZPI), has released a new standard, Valuations Standard 3 - Valuations for Financial Statements ("VS-3"). This is in response to the introduction of the new New Zealand financial reporting standard FRS-3 Accounting for Property, Plant and Equipment ("FRS-3"). It is the first new standard since 1998 Board Chair, John Dunkley said today, "There are some significant changes to the way valuations are undertaken under this new standard that valuers and the financial community need to understand. "
Main changes to VS3 are in the following
* Valuing under FRS-3 and SSAP-17,
* A shift to "Fair Value"
* Optimisation and Borrowing Costs (Depreciated Replacement
* Revaluation Frequency
* Asset Componentisation,
* Owner-occupied properties
* Market Indices for Plant and Equipment,
* Disposal Costs
FRS-3 results from the revision of existing accounting standards, SSAP-28: Accounting for Fixed Assets and SSAP-3: Accounting for Depreciation. FRS-3 is effective for periods ending on or after 31 March 2002 and brings about new requirements for valuers in providing valuations of property, plant and equipment items for financial reporting purposes.
In addition to meeting the requirements of FRS-3, the redraft of VS-3 continues to recognise the requirements of SSAP-17: Accounting for Investment Property and Properties Intended for Sale ("SSAP-17)".
The New Zealand property Institute has organised a road show on the new Standard in Auckland, Wellington, and Christchurch on April 9 and 10.