What is a Red Book valuation used for?
A Red Book valuation is used whenever other people must be able to rely on the figure: secured lending, financial reporting, investment funds, buying and selling, tax and disputes. It is a written valuation by an RICS member or RICS-regulated firm that complies with RICS Valuation – Global Standards, which adopt and apply the International Valuation Standards.
Which uses does the Red Book cover in detail?
Its valuation practice guidance applications (VPGAs) cover, among others, valuations for financial reporting (VPGA 1), secured lending (VPGA 2), businesses and business interests (VPGA 3), trade related properties (VPGA 4), real property interests (VPGA 8) and portfolios (VPGA 9).
Why does it matter to a bank, auditor or court?
Because the report must state the same core matters every time — who the valuer is, the purpose, the basis of value, the valuation date, the extent of investigation, the assumptions, the approach and the reasoning (VPS 6). A reader can test the figure instead of trusting it. See What is a Red Book valuation? and What are the International Valuation Standards?.
Is a Red Book valuation the same as an IVS valuation?
They align. The Red Book adopts and applies IVS and adds RICS requirements and guidance, so a Red Book valuation is also carried out under IVS. See IVS vs Red Book.
Read next
- What is a Red Book valuation?
- What are the International Valuation Standards?
- IVS vs Red Book
- Valuation glossary