NIEVS Condemns Valuation of Plants, Machinery by Nonprofessionals

The Nigerian Institution of Estate Surveyors and Valuers (NIESV) has condemned the valuation of plants and machinery by non-professionals as a source of revenue loss to government at all levels.

According to the Chairman, Faculty of Housing, NIESV, Mr. Paul Osaji, government at all levels were losing huge revenue that should come from taxes on machinery and plants, because they depend on unqualified professionals, who are neither estate surveyors nor valuers to do the valuation of these equipment.

Osaji said, “With proper valuation of industrial machinery and plants, be it the breweries, aviation, communication outfits, taxes that would be generated either by the federal, state or local governments in term of revenues are so huge that their effective exploitation is capable of eliminating total dependence on revenue from oil, not to talk of engaging in external borrowing.” The involvement of qualified professionals, in this case, Estate Surveyors and Valuers would improve the revenue base of government, said Osaji, who is the Managing Partner, Paul Osaji & Co.

He explained the processes and a set of procedures used to determine the economic value of an owner’s interest in an asset, saying “Valuation of Assets may generally be required for following purposes: Mergers and Acquisitions – Pre Merger and Post Merger.

“From Financial Reporting Banking (Lending against Assets), it involves impairment studies, purchase price allocation, Distress Assets/ non-Performing Asset, Court & Litigation support, including management information and strategic planning.

“Other processes include insurance, initial public offerings, cost investigations disinvestment, among others.

“The scope of Valuer include complete understanding of valuation purpose, collection of data and documents and understanding, physical inspection of subject assets, market survey and collection of data pertinent to the valuation exercise.” Osaji said others are collection of technical details for the subject assets and analysis of technical data and the supporting information, assessment of balance economic life of the subject assets, determination of valuation parameters, methodology, basis of valuation and key assumptions.

“From the foregoing, one will not, but admitted that only those who are professionally qualified, in this case Estate surveyors and Valuers are in position to be engaged in valuation exercise, not the lawyers, the accountants, or architects. Although their services may be needed in other ancillary areas, but not in the nitty-gritty of plant valuation.”

The reason for this, he said was that “Plant Valuation is highly complex in nature as our practice caters to a wide spectrum of industries each having plant and machinery with its own inherent characteristics.