Methodological Lapses in Plant and Equipment Valuation among Lagos Valuers

Abstract

Valuation methodology deals with the process and standards applied in developing an opinion of value for an asset (plant and equipment). The study is aimed at investigating the level of discrepancy in the valuation process adopted by valuers in the study area (Lagos Nigeria). The study isbe based on both structured questionnaire and content analysis. The questionnaire was randomly distributed amongst 175(41.1%) practicing estate firms out of 450 firms in Lagos. 173 of the questionnaire were retrieved and used for analysis. The content analysis was based on 54 valuation reports on plant and equipment to investigate the extent of compliance to valuation process and standards amongst practitioners in the study area. Findings from the study show that most of the valuers are not adhering to standards. Majority of the respondents could not apply valuation methods and process appropriately and much important information is omitted during inventory. This could be a source of variance and inaccuracy. There are lapses in the valuation process as evidenced in scarcity data obtained during inventory. The study in consequence recommends specialization and certification of members, production of detailed valuation manual for the plant and equipment valuation and enforcement, and training of members to improve practice standards.