Before valuation, each asset must be clearly identified by documenting proof of ownership, location, technical condition, accessories and existing rights of use. It must then be determined whether the assumed method is an individual sale, a sale in related groups or a sale of the business as an economic unit. Depending on the asset, comparable prices, replacement costs, income prospects or expected sale proceeds may be used. The valuation should disclose its assumptions about the sale period, market breadth, condition, necessary repairs and available information. Encumbrances, third-party rights and obstacles to transfer must be presented separately from the gross value determined. To estimate net proceeds, account must be taken of sale, security, storage, transfer and other realization costs. Specialized equipment, real estate, equity interests or intellectual property rights may require a specialized professional valuation. If the sale is delayed or the market, condition or usability changes, the valuation should be updated. The actual price achieved may differ from the estimated value; significant differences should be explained after the sale is completed.
Valuation of an Insolvent Company’s Assets for Realization in Georgia
Valuing insolvency assets in Georgia must reflect the planned sale method, the valuation date and the condition of the assets. Book value, market value and the expected realization price are different measures and must not be treated as equivalent.
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