PROCEDURES AND PROCEDURES FOR VALUATION OF REAL ESTATE

Abstract

Going concern principle is based on the assumption that a company is established to operate for an indefinite period of time. In order to maintain this assumption, it is necessary to evaluate the value of the capital and assets of the company by following the requirements of business events and transactions, or business combination of the company. Determining the value of a property or real estate is based on determining the selling price, taking into account the economic benefits that real estate will bring in the future. The determination of the sale price, that is, the objective value of the real estate, is based on the determinants of the normative regulatory framework. The normative regulatory framework for valuation presupposes compliance with the requirements of professional, legal and internal regulations. By following the requirements of the International Valuation Standards and national standards in the Republic of Serbia, the following three methodological concepts are most often applied: comparative, yield and cost. The paper aims to point out the specifics of the application of the mentioned methods when evaluating real estate, taking into account all the advantages and disadvantages of the same. Analysis of the real estate market concluded that the practical application of these concepts is conditioned by the purpose of the assessment. In ideal market conditions, the application of any method should lead to the same result. However, since the market is a changing and uncertain category, the outcome also depends on the valuation method used.