Appraisal Method - Capitalisation

15 Feb 2017 9:45 AMTroy Potter
Appraisal Method - Capitalisation




Capitalisation Method

There is sometimes a case to be made for a business value that includes the time

and capital needed to establish a business to a stage of development rather than

the profit or income it generates.


This method allows the use of intangible assets such as time & cost taken to obtain

industry specific licenses that are valuable and transferable. It may also include, council

development or change of use approvals that are a significant barrier to entry for new

startup enterprises.


An example would be a new restaurant build, as opposed to a renovation, that includes

Council approvale for use as a food establishment. Even without the physical assets such

as Exhaust canopies and grease traps there is intrinsic value to a purchaser in having

pre-approved Development consent.


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