Official and unofficial valuation standards in Sweden (2817) |
| Peter Samuelsson (Sweden) |
Mr Peter Samuelsson
CEO
Bryggan Fastighetsekonomi
Box 60325
Limhamn
SE-216 08
Sweden
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| Corresponding author Mr Peter Samuelsson (email: peter.samuelsson[at]bryggan.se, tel.: +46 40 17 09 49) |
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| [ abstract ] [ handouts ] [ handouts ] |
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Published on the web 2008-03-21
Received 2008-01-31 / Accepted 2008-03-14 |
| This paper is one of selection of papers published for the FIG Working Week 2008 in Stockholm, Sweden and has undergone the FIG Peer Review Process. |
FIG Working Week 2008
ISBN 978-87-90907-67-9 ISSN 2307-4086
http://www.fig.net/resources/proceedings/fig_proceedings/fig2008/index.htm
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Abstract |
| Almost all property valuations in Sweden are carried out from a market approach. The theoretical background and basic valuation principles used were to a great extent established in the 1970´s by the research team working at the Institution of Real Estate Economics at the Royal Institute of Technology in Stockholm. A doctoral dissertation, published in 1979 by Stellan Lundström, is regarded as the embryo to the widespread use of the discounted cash flow method (DCF) in valuations of multi family houses, commercial properties and industrial properties.
Legislation concerning property assessment and expropriation are based on the market value principle. The property assessment law includes a definition on market value as well as a description of a valuation standard to be applied in the assessments. In applications of the laws where property valuations are included, e.g. expropriation and regulation of lease hold fees, comparable sales methods normally are favoured by the courts. However, in many specific situations comparable sales methods are not applicable. Specially designed methods developed by the National Land Survey or in negotiations between the parties concerned, are in some frequent cases adopted as practice by the courts.
Professional practising valuers are members of the Association of Swedish Valuers, which is a branch of The Swedish Society of Real Estate Economics – SFF. SFF is a member of the International Valuation Standards Committee (IVSC). Members of the Association of Swedish Valuers can apply for authorization and become certificated by SFF. The requirements for authorization are education, professional practice, current market knowledge and impartiality.
The most detailed valuation standard used in Sweden is the Valuation Guidelines for SFI/IPD Swedish Property Index. Definitions and value terms in the guidelines adhere to European Valuation Standards 2003 (EVS 2003), issued by The European Group of Valuer´s Associations (TEGoVA) and to the International Valuation Standard, issued by IVSC.
In addition to definitions - valuation principles, common valuation preconditions and valuation report requirements are described in the guidelines, which also have become a benchmark in valuations for other purposes besides the index.
Since 2005 all public companies are obliged to report consolidated financial statements according to the International Financial Reporting Standards (IFRS). Properties and other non-current assets should be entered in the balance sheet to their fair value. Swedish companies use both internal and external valuations to determine the values on the day of balance. The valuations are carried out according to the IVSC standards.
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| Keywords: Valuation; Valuation standards; valuation methods; Property assessment; Swedish property index; certification of valuers |
