1. Define valuation.
Ans: valuation is the technique of estimating or determining the fair
price of a property such as building, a factory, other engineering
structures of various types, lands, etc. By valuation the present value of a
property is determined.
2. What is the purpose of valuation?
Ans:
1) Buying or selling property
2) Taxation
3) Rent fixation
4) Security of loans or mortgage
3. Define gross income.
Ans: Gross income is the total income and includes all receipts from
various sources the outgoings and the operational and collection charges
are not deducted.
4. Define net income or net return.
Ans: This is the saving or the amount left after deducting all out goings
from the gross income.
Net income = Gross income - outgoings.
5. What is the difference between scrap value and salvage value?
Ans: Scrap value is the value of dismantled materials. (For a building
when the life is over the end of its utility period the dismantled materials
as steel, brick, timber, etc., will fetch a certain amount which is the scrap
value of the building) were as salvage value is the value at the end of
the utility period without being dismantled. ( A machine after the
completion of its usual span of life or when it becomes uneconomical,
may be sold and one may purchase same for some other purpose, the
value of the machine is the salvage value.)
6. Define Book value.
Ans: Book value is the amount shown in the account book after allowing
necessary depreciations. The book value of the property at a particular
year is the original cost minus the amount of depreciation up to the
previous year.
7. Define Obsolescence.
Ans: The value of the property or structure becomes less by its
becoming out of date in style, in structure in design, etc., and this is
termed as Obsolescence.
8. Define capital cost.
Ans: Capital cost is the total cost including the land cost.
9. Define capitalized value.
Ans: The capitalized value of the property is the amount of the money
whose annual interest at the highest prevailing rate of interest will be
equal to the net income from the property.
10. Define Year’s purchase (Y.P).
Ans: Year’s purchase is defined as the capital sum required to be
invested in order to receive an annuity of Re. 1.00 at certain rate of
interest.
11. Define sinking fund.
Ans: The fund which is gradually accumulated by way of periodic on
annul deposit for the replacement of the building or structure at the end
of its useful life is termed as Sinking fund.
12. Define Depreciation.
Ans: The decrease or loss in the value of the property due to structural
deterioration use, life wear and tear, decay and obsolescence is called
depreciation.
Usually a percentage on depreciation per annum is allowed. The general
annul decrease in the value of a property is known as Annul
depreciation.
13. What are the different methods for calculating depreciation?
Ans:
1) Straight line method.
2) Constant percentage method.
3) Sinking fund method and
4) Quantity survey method.
14. What are the different method to calculate present day cost?
Ans:
1) Cost from records.
2) Cost by detailed measurement.
3) Cost by plinth area basis.
15. What are the various methods of valuation?
Ans:
1) Rental method of valuation.
2) Direct comparison with the capital value.
3) Valuation based on profit.
4) Valuation based on cost.
5) Development method of valuation.
6) Depreciation method of valuation.
16. Define Freehold property and leasehold property.
Ans: Freehold property: A freehold property means that the owner is in
possession of the property, and the owner can utilize the same in any
manner he likes.
Leasehold property: The owner of a freehold property may give the
permission to any other person to use his freehold which is known as
leasehold property.
They are two types of lease: 1) Building lease 2) Occupation lease.
17. Define Easement and give some mail easements.
Ans: Easement are the rights and privileges which one owner of the
property enjoys through or over the property of others. The main
easements are:
1) Right of assess from the adjoining owner’s land.
2) Right to use light and air from and over the property of the
adjoining owners land.
3) Right to run and maintain water and drainage pipes through the
neighbour’s land.
4) Right of flow of rain water over the other’s land.
5) Right of support for a building from the adjoining owner’s land.
18. Define the term ‘Deferred income’.
Ans: Deferred income (also known as deferred revenue, unearned
revenue, or unearned income) is, money received for goods or services
which have not yet been delivered.
19. Define market value.
Ans: The amount which can be obtained at any particular time from the
open market if the property is put for sale is known as Market value.
20. Write the various types of out goings in maintaining a building.
Ans:
1) Taxes.
2) Repairs.
3) Sinking fund.
4) Management and collection charges.
5) Loss of rent.
