Circular No. 31/2024/TT-BTC Issuing the Vietnamese Valuation Standards on Information Collection and Analysis

VIETNAM VALUATION STANDARDS
ON COLLECTING AND ANALYZING INFORMATION ABOUT VALUED ASSETS

(Accompanied by Circular No. 31/2024/TT-BTC dated May 16, 2024 of the Minister of Finance)

Article 1. Scope of Regulation

These Vietnam Valuation Standards stipulate and guide the collection and analysis of information about valued assets during the valuation process as prescribed by the law on prices.

Article 2. Applicability

1. Developable real estate is land intended for construction or land with structures that can be renovated or demolished to construct buildings for optimal and most effective use.

2. The residual method is a valuation method that determines the value of developable real estate based on subtracting estimated reasonable development costs (including investor profit) from the estimated development value (total development revenue) to create such development (total development cost).

Article 4. Approaches and Methods of Real Estate Valuation

Article 3. Explanation of Terms

1. The person conducting the valuation activity is a price appraiser or an individual performing state valuation activities according to the law on prices.

2. The information collector is the person conducting the valuation activity or an assistant to the price appraiser or a member assisting the valuation committee.

3. Collecting information about valued assets is the process of searching, selecting, and gathering information about valued assets to serve the valuation process of such assets.

4. Analyzing information is the process of consolidating, reviewing, and evaluating all collected information to serve the valuation process, thereby assessing the impact of various factors on the valuation process and the final value of the valued asset.

Article 4. Collection of Information

1. Information to be collected about valued assets includes legal, economic-technical characteristics, market information, and other relevant information about the valued assets.

In cases where the valued asset is a property right or future-formed asset, information must be collected regarding the establishment of ownership and formation of these assets, land use planning, and construction planning (if applicable) as prescribed by competent authorities under relevant laws.

2. Collecting information about valued assets is a mandatory requirement when conducting asset valuations. Information collection must be objective, accurate, systematic, appropriate to the valued asset, the purpose of the valuation, the valuation basis, and consistent with the approach and methods of valuation as prescribed by the Vietnam Valuation Standards issued by the Ministry of Finance.

3. The person conducting the valuation activity is responsible for organizing the collection of information and must document the results of the information collection in the valuation file as prescribed.

If the information collector is not the person conducting the valuation activity, the person conducting the valuation activity is responsible for assigning and guiding the information collector to perform the information collection as prescribed.

4. The information collector is responsible for the objectivity and truthfulness of the information and data they have collected. The person conducting the valuation activity is responsible for reviewing, evaluating, analyzing, and using the collected information to conduct the asset valuation as prescribed.

5. Information about valued assets is collected at the time of valuation. Information collected after the valuation date may only be used for reference purposes to analyze and evaluate changes in the asset's value (if necessary).

6. In cases where limitations arise that cannot be overcome due to objective and force majeure reasons, affecting the valuation activity and the estimation of the asset's value, the information collector must report to the person conducting the valuation activity so that the person conducting the valuation activity can clearly reflect this content in the valuation report and appraisal certificate or notify the valuation result.

7. For information collected within the list of information that must be kept confidential or can only be used within a certain scope as prescribed by law, such as unpublished information or state secrets, the information collector must comply with the legal provisions on information confidentiality when collecting and using such information.

Article 5. Sources of information to be collected

1. The sources of information to be collected about the asset being appraised include:

a) Information provided by the organization or individual requesting the appraisal, reflecting the legal characteristics (such as ownership rights, usage rights, exploitation rights, management rights, and other related rights to the asset), economic and technical characteristics (including the process of using, operating, exploiting, repairing, and upgrading the asset), and other relevant information about the asset being appraised (if applicable). The organization or individual requesting the appraisal shall be responsible for the accuracy and truthfulness of this information;

b) Information from the results of on-site surveys of the asset being appraised;

c) Information from experts, appraisal organizations, design consultancy organizations, construction and technical organizations, and other organizations or individuals with knowledge and experience regarding the asset being appraised (if applicable);

d) Information from the results of market surveys and information collection on market participants of the asset being appraised;

đ) Information from national databases on prices and information from state management agencies with authority (if applicable);

e) Other sources of information (if applicable).

2. The sources of information collected must be clearly stated in the appraisal dossier along with the reasons and evaluation of the suitability of these sources of information for the requirements of the asset appraisal.

Article 6. Methods of collecting information

1. Methods of collecting information about the asset for valuation purposes:

a) Requesting the organization or individual requesting the appraisal to provide all necessary and timely documents and materials about the asset being appraised, including documents about the process of using, operating, and exploiting the asset, and documents about repairing and upgrading the asset (if applicable). The organization or individual requesting the appraisal must confirm in writing the contents of the information they provide;

b) Conducting on-site surveys of the asset being appraised:

The person collecting information directly conducts the survey and records all characteristics and conditions of the asset, significant information and factors affecting the value of the asset; takes photos of the asset and images that serve as evidence of its condition; prepares a record of the on-site survey. The record of the on-site survey of the asset being appraised must have the signatures of the person collecting information and the organization or individual requesting the appraisal.

For assets being appraised that are enterprises, intangible assets, financial assets, services, or future-formed assets: the person collecting information conducts on-site surveys of those assets or parts of the asset that can be surveyed directly in reality.

Cases where it is not necessary to conduct an on-site survey of the asset if the person collecting information can provide sufficient reasons for the inability to survey the asset, including:

The asset being appraised is new machinery, equipment, tools, or services where the proposed appraisal list or label or attached documentation contains complete information about the economic and technical characteristics of the asset; at the same time, there are identical assets being traded or sold on the market;

The asset being appraised has been lost, misplaced, or completely destroyed;

The asset being appraised cannot be accessed directly due to objective or force majeure reasons, and the person collecting information must clearly state the impact on the appraisal activity (if any). The person conducting the appraisal must clearly state the impact on the estimation of the value of the asset being appraised (if any) in the appraisal report and appraisal certificate or notification of the appraisal result;

c) Using advisory opinions from experts, organizations, or individuals providing consulting services for appraisal, design, construction, technical services, and other services related to the asset being appraised;

d) Based on the characteristics of the asset being appraised, the approach and appraisal methods issued by the Ministry of Finance that the person conducting the appraisal activity plans to select, the survey and collection of information about the market and market participants at the time of appraisal will be carried out according to one of the following methods:

Interviewing through one of the following forms: face-to-face, by telephone, or via email with individuals or organizations having information about the ownership, use, and transfer of the asset, such as: owners; users, operators, exploiters, maintainers, repairers of the asset; customers; suppliers; manufacturers; consumers. The interview process and results must be recorded on a survey form and stored as prescribed in this Circular;

Collecting information from customs declarations or purchase contracts, invoices, sales documents, quotations, lists, reports of importers, manufacturers, suppliers, investors, and other related parties;

Collecting information through information and communication media, such as books, magazines, publications, articles, research organization evaluations, industry associations, expert opinions, domestic and international ranking organizations; on the Internet; electronic information portals; radio stations, television stations;

đ) Collecting information from national price databases, information from state agency documents, including price levels set by state agencies; unit prices, specialized norms related to the asset being appraised; economic and social data, environmental data, planning data, and other content affecting the value of the asset being appraised published or stipulated by state agencies (if applicable);

e) Using other methods of collecting information as prescribed.

2. The person collecting information must store evidence of their information collection activities in accordance with the standards set forth herein and Vietnamese Appraisal Standards.

a) In case the information collection process uses survey forms, investigation forms, data collection forms, or evaluation forms, these forms must be stored with the full name and signature of the information collector; in cases where the collected information pertains to the legal characteristics and economic-technical features of the asset being appraised, the full name and signature of the party requesting the appraisal must be recorded.

b) If expert opinions or advice from organizations or individuals providing consulting services are utilized, the advisory documents must be stored along with the signature of the expert or the stamp and signature of the consulting organization, and the service contract for consultancy (if applicable).

c) When using information collected from the internet, specific links to the collected information must be cited, and images must be stored to prove the collection process. An information collection form regarding this content must also be created, which must bear the signature of the information collector.

Article 7. Review and Evaluation of Collected Information

1. Based on the collected information, the person conducting the appraisal activity shall review and utilize reliable and appropriate information and data for analysis and application of appraisal approaches and methods.

2. For information from documents and materials about the appraised asset provided by the requesting organization or individual, if there are discrepancies between such information and the results of the current status survey of the asset or if incomplete or insufficient documentation is discovered requiring further clarification for the appraisal, timely communication with the requesting organization or individual should be conducted to request additional information or clarification.

The process of exchanging information for supplementary documentation or clarifying content must ensure objectivity and compliance with relevant legal regulations, strictly prohibiting any actions that influence the appraisal activity and the value of the appraised asset.

3. For other information, careful consideration and evaluation of its use based on an analysis of the reliability and appropriateness of the information source, the provider, the content, the time of collection, and the method of collecting information related to the appraised asset is required.

Article 8. Information Analysis

1. The content of information analysis must be reflected in the appraisal report. During the information analysis process, assumptions and special assumptions may be proposed; the content of these assumptions must comply with the provisions of the Vietnamese Appraisal Standards concerning the basis for valuation.

2. Collected information is analyzed according to the following categories:

a) Analyze basic information about the requesting organization or individual; the purpose of the appraisal; the appraisal date; the legal basis for the appraisal; the valuation basis.

b) Analyze information about the legal and economic-technical characteristics of the appraised asset.

c) Analyze market information about the appraised asset.

d) Analyze the best and most effective use of the asset (applicable only to real estate assets).

The best and most effective use of an asset is the use that complies with legal regulations, technical conditions, and achieves the highest economic efficiency.

The best and most effective use of an asset may involve continuing to use it for its current purpose or switching to another purpose; therefore, an analysis and presentation of arguments proving the suitability of the asset's use with legal, socio-economic, and financial factors to determine the best and most effective use of the asset is necessary.

d) Analyze information about other related contents./

MINISTRY OF FINANCE