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IMPORTANCE OF CORPORATE ASSETS’ VALUATION IN PERFORMANCE EVALUATION: A REVIEW OF LITERATURE

OLANIRAN, MIKAIL OLAYIWOLA AND ONAKOYA, B. O, Volume 4 Issue 1, 2020 Pages 119-133, Published: 2021-10-10

Abstract

Analyses of company performance are conducted to enable the management and owner(s) of a particular business concern, as well as competitors, government and its agencies and the general public to evaluate worthwhileness of its existence and make critical decisions from time to time. One of the key factors in these analyses is company assets, which values must accurately be determined to aid sound decision making. Estate Surveyors and Valuers determine open market values of concerned assets, for different purposes, that usually leads to variety of analysis and decision such as company performance. The focus of this research is the nonuse of up-to-date values of corporate assets in company’s financial accounts as well as reporting and subsequently in performance evaluation despite opportunity offered by the valuation profession. A review of some existing literature worlwide was carried out, to justify the importance of valuation of assets in company performance analysis. Identified problems include; a growing perception amongst business operators, that the valuation did not necessarily provide the right information to them, hence the use of existing values which is usually calculated on the basis of historic cost. It recommended that valuers must be purely transparent in their dealings, to ensure that information provided is accurate and not misleading and implored companies to conduct valuation of their assets periodically, in order to get their fair values or current open market values of corporate assets, instead of historical values