12.3.6 A feasibility study may also be required in the valuation of development properties for financing purposes. A feasibility study determines the viability of the proposed property development. The study may include investment analyses and financial performance to evaluate as to whether it is likely to be carried out successfully or pursued under a proposed development plan and may include advice to further improve the viability of the proposed project development.
Malaysian Valuation Standards Page 41 of 55 MALAYSIAN VALUATION STANDARDS STANDARD 13 UPDATE VALUATIONS 13.1 INTRODUCTION 13.1.1 The general rule remains that a valuation should be communicated to a client only by way of a full Valuation Report. However, a report may not be essential in communicating an opinion of value to the client in certain cases. Such valuations include letters in advance of a report and situations where a previous valuation has been done by the firm, and where a financial institution has extended loans on the collateral security of the asset/property and now requires an update of the value for the sole purpose of assessing the adequacy or otherwise of the collateral security. Another situation is where there is a need under the Financial Reporting Standards for quarterly, half- yearly or annual updates on values. Such valuations are referred to as Update Valuations. 13.2 STATEMENTS OF STANDARD 13.2.1 An update valuation can only be provided, if; (a) it is prepared in connection with an interest in a property, which was previously valued by the same firm, for the same client and for the same purpose. The previous valuation must have been in the form of a Valuation Report prepared in accordance with MVS 8 (Valuation Reports); (b) the previous Valuation Report was prepared not more than three years prior to the date of the Update Valuation; and (c) it is not used by the client or lending institution, for obtaining/granting fresh loans or additional funding based on the updated value reported, and this must be stated in the Update Valuation. 13.3 EXPLANATIONS 13.3.1 Firms are only permitted to undertake full Valuation Reports as provided for under MVS 8 (Valuation Reports) and Update Valuations as provided by this Standard. 13.3.2 All other forms of valuations such as "Brief Valuations", "Check Valuations", "One-page Valuations", "Desk Top Valuations", "Indicative Valuations in writing", "Proforma Valuations" etc. are NOT permitted and shall not be undertaken by
Malaysian Valuation Standards Page 42 of 55 Valuers except for valuations done under MVS 14 (Mass Valuation for Property-Backed Portfolios). 13.3.3 It is a feature of the market in Malaysia whereby banks/ financial institutions require indicative values for purposes of initiating loan processing. However, Valuers do not carry any professional liability for indicative values extended to the banks/ financial institutions.
Malaysian Valuation Standards Page 43 of 55 MALAYSIAN VALUATION STANDARDS STANDARD 14 MASS VALUATION FOR PROPERTY-BACKED PORTFOLIOS 14.1 INTRODUCTION 14.1.1