4.1 The following table is reproduced from Table F1 in the ATO publication Market valuation for tax purposes, available on www.ato.gov.au.

Table 9: ATO risk matrix for quality of the valuation process and documentation
Risk → High Medium Low
↓ Criteria

 

Appropriateness of methodologies

Assuming continuation of existing use, the valuations do not sufficiently demonstrate that:

  • methods are consistent over similar asset types
  • methods are the most appropriate
  • appropriate data was used.

Assuming continuation of existing use, the valuations demonstrate mostly that:

  • methods are consistent over similar asset types
  • methods are the most appropriate
  • appropriate data was used.

Assuming continuation of existing use, the valuations demonstrate fully that:

  • methods are consistent over similar asset types
  • methods are the most appropriate
  • appropriate data was used.
Qualifications of person undertaking valuation

Person undertaking the valuation can demonstrate few, if any, of the following attributes:

  • appropriate knowledge and industry experience
  • professional membership
  • subject to external regulation
  • retains specialist advice where appropriate
  • holds appropriate licences or authorities.

Person undertaking the valuation can demonstrate most of the following attributes:

  • appropriate knowledge and industry experience
  • professional membership
  • subject to external regulation
  • retains specialist advice where appropriate
  • holds appropriate licences or authorities.

Person undertaking the valuation can demonstrate all of the following attributes:

  • appropriate knowledge and industry experience
  • professional membership
  • subject to external regulation
  • retains specialist advice where appropriate
  • holds appropriate licences or authorities.
Use of supporting methods

No cross-check of valuation where it would have been appropriate.

Single cross-check of valuation where appropriate.

Valuation cross-checked with other methods where appropriate.

Integrity of process

Person undertaking valuations cannot demonstrate:

  • appropriate experience
  • basis of engagement subject to external regulation
  • professional relationship
  • access to information.

Person undertaking valuations can demonstrate most of the following:

  • appropriate experience
  • basis of engagement subject to external regulation
  • professional relationship
  • access to information.

Person undertaking valuations can demonstrate:

  • appropriate experience
  • basis of engagement subject to external regulation
  • professional relationship
  • access to information.
Information supplied in the market valuation report

Report does not include enough of the following information required by the ATO to understand the market valuation report:

  • description of the assets valued to enable identification
  • purpose and context of valuation
  • specific market value date or period to which valuation relates
  • date valuation was commenced and completed
  • details of the methods used
  • information the valuation is based on
  • details of all assumptions used.

Report does include most, but not all, of the following information required by the ATO to understand the market valuation report:

  • description of the assets valued to enable identification
  • purpose and context of valuation
  • specific market value date or period to which valuation relates
  • date valuation was commenced and completed
  • details of the methods used
  • information the valuation is based on
  • details of all assumptions used.

Report includes all of the following information required by the ATO to understand the market valuation report:

  • description of the assets valued to enable identification
  • purpose and context of valuation
  • specific market value date or period to which valuation relates
  • date valuation was commenced and completed
  • details of the methods used
  • information the valuation is based on
  • details of all assumptions used.
Use of existing valuations

No documentation as to the relevance of earlier valuations or inadequate documentation of changes.

Adequate documentation as to the relevance of earlier valuations and/or adequate documentation of changes.

Complete documentation as to the relevance of earlier valuations and/or complete documentation of changes.