VALUATION

In order to know the meaning of the term valuation, the first thing we are going to do is discover its etymological origin. And in this sense we have to state that it is a word that derives from Latin, specifically from the verb “valere”, which can be translated as “be strong”.

Valuation

Valuation is the act and result of valuing (setting the price or value of something). For example: "An audit will establish the valuation of the company" , "Taking into account the increase in costs, I suggest that we analyze each of our products to make a new valuation of them" , "The debt valuation is will meet in the next few weeks .

The valuation process can be carried out on both assets and liabilities . In general, different techniques are used to establish the monetary value of what is analyzed.

Valuation can be used when a company begins to offer its shares in the capital market or when an investment group is considering buying a company , to name two possibilities. The process is also carried out when preparing a corporate merger .

For a proper valuation, it is important to have reliable financial data . Suppose a technology company presents adulterated balance sheets or financial statements, where it overstates revenue. If a valuation is made on this information, the result will be that the company is valued in a higher way than its reality indicates.

Tax rates often depend on the valuation of the land or properties . If, in a certain city, there is an annual real estate tax of 2% on the tax valuation of homes, the amount to be paid by the taxpayer will depend directly on the price that the State sets for your home according to different formulas.

It must be stated that there is what is known as a cost valuation. It is used within the scope of accounting and is used to refer to the action that an agent carries out through a technical procedure in order to determine the value of specific assets and that shape someone's assets. But it is also used to refer to the value resulting from that aforementioned process.

In the same way, it is established that the valuation of some assets is carried out in two fundamental phases:
-The entry into equity, which refers to both what is the acquisition and the transformation of the aforementioned assets.
- The exit of the patrimony, that is realized in the form of cost.

Of course, we cannot forget that there is also what has been called job valuation. This term refers to what is the process that tries to achieve a good environment and optimal human relations between the people who shape the workforce of a company.

To achieve this, this procedure is developed, which consists of determining the individual value that a position has within a company in relation to the other positions that make up that company.

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