Edition 2020 Ninth edition

GLOSSARY OF TERMS
A
Alternative use value
The value of the property under a use other than the present one.
Assumption
A fact or condition about the property assumed by the valuer (whether instructed 
or otherwise) which he or she does not or cannot know or reasonably ascertain.
B
Basis of value
A statement of the fundamental assumptions for undertaking a valuation for a 
defined purpose.
C
Comparable
A property deemed by the valuer to be similar to the one being valued.
Cost Approach
A valuation approach which provides an indication of value based on the economic 
principle that a buyer will pay no more for a property than the cost to obtain a prop-
erty of equal utility, whether by purchase or by construction, including the cost of 
sufficient land to enable that construction. It will often be necessary to make an 
allowance for obsolescence of the subject property compared with a brand new 
equivalent one.
Cost-benefit analysis
A technique to assist in decision making when comparing alternative properties, 
sites or projects. The technique involves the consideration and measurement in 
financial terms of all costs and benefits.

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386
Glossary of terms
European Valuation Standards 2020
D
Date of inspection
The date at which the inspection took place.
Date of report
The date at which the valuer signs the report.
Date of valuation
The date to which the opinion of value applies.
Departure
Circumstances where the mandatory application of the valuation standards may 
be inappropriate or impractical.
Depreciable amount
The cost of an asset, or other amount substituted for cost, less its residual value.
(IAS 16)
Development property
Land and/or buildings undergoing works of construction, reconstruction or refur-
bishment or which are suitable for such works in the immediate future.
E
Excess land (or surplus land)
Land within the property that is not essential to the operational purposes 
of buildings.

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European Valuation Standards 2020
Glossary of terms
387
F
Fair Value (for accounting purposes)
The price that would be received to sell an asset or paid to transfer a liability in an 
orderly transaction between market participants at the measurement date.
International Accounting Standards Board (IASB), International Financial Reporting Stand-
ards (IFRS) 13, par. 1.
Fair Value (general definition)
The price that would be received to sell a property in an orderly transaction 
between identified willing market participants possessing full knowledge of 
all the relevant facts, making their decision in accordance with their respec-
tive objectives.
Financial statements
Written statements of the financial position of a person or a corporate entity, and 
formal financial records of prescribed content and form. These statements carry 
a measure of public accountability within a regulatory framework of accounting 
standards and the law.
Forced sale value
A sum that could be obtained for the property where, for whatever reason, the 
seller is under constraints that require the disposal of the property under condi-
tions that do not conform with the definition of Market Value.
G
Gross development value
The end value of a completed development envisaged under a residual method 
of valuation.

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388
Glossary of terms
European Valuation Standards 2020
Guaranteed replacement cost
The payable amount limited to the insured value as stated in the insurance 
policy, but if the damage exceeds the limits on the policy, the insurance company 
is obligated to fully replace or rebuild the property without any deduction 
for depreciation.
H
Highest and best use
Integral to Market Value, it is the use of a property that is physically possible, rea-
sonably probable, legal or likely to become so, and that results in the highest value 
of the property at the date of valuation.
I
Income Approach
A form of investment analysis based on a property's capacity to generate net ben-
efits (i.e. usually monetary benefits) and the conversion of these benefits into a 
present value.
Insurable value
The cost of replacing the damaged property with materials of like kind and quality 
and without any deduction for depreciation.
Investment value
The value of a property to an owner or prospective purchaser, calculated on the 
basis of their individual investment criteria.
M
Market Approach
A valuation approach where the valuation is produced by comparing the subject 
property with the evidence obtained from market transactions that fulfil the cri-
teria for the relevant basis of value.

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European Valuation Standards 2020
Glossary of terms
389
Market Rent
The estimated amount for which the property should be leased on the date of 
valuation between a willing lessor and a willing lessee on the terms of the actual 
or assumed tenancy agreement acting independently of each other after proper 
marketing wherein the parties had each acted knowledgeably, prudently and 
without being under compulsion.
Market Value
The estimated amount for which the property should exchange on the valuation 
date between a willing buyer and a willing seller in an arm's-length transaction 
after proper marketing wherein the parties had each acted knowledgeably, pru-
dently and without being under compulsion.
Due to diverging non-English language versions of the CRR definition, TEGOVA 
has a universally usable common guidance-definition: