Value is nothing but the worth or utility of certain building, property, machinery, equipment, etc. Value always changes from time to time and always depend upon supply and demand. The value of the property within short time may be more than its existing worth or price. There are many types of values which are used while Estimating and Costing of certain thing.
Different Types of Value Used in Civil Engineering :
1. Scrap Value :
Scrap Value is defined as the Value of dismantled materials. For a building when the life is over at the end of it’s utility period, the dismantled materials like steel, timber, bricks, etc will fetch certain value which is called as the Scrap Value of that building.
2. Salvage Value :
It is the value of the building at the end of the utility period without being dismantled. For example, A machine after the completion of it’s usual span of life or when it becomes uneconomical to use, it may be sold and the same machine may be purchased by the other person for use for some other purpose. The price at which he purchased that machine is called as Salvage Value and which is called as Sale Value.
3. Market Value :
The market value of the property is the amount which can be obtained at any particular time from open market if property is put on for sale. Market Value may differ from time to time according to demand and supply. The Market Value also changes from time to time for various miscellaneous reasons such as change in industry, change of fashion, cost of labours and materials, cost of transportation etc.
4. Book Value :
Book Value is the amount shown in the account book after allowing the necessary depreciation. The Book Value of the property at a particular year is original cost minus the amount of depreciation upto previous year. The Book Value depends upon the amount of depreciation allowed per year and will gradually increase year to year and at the end of utility period of property the Book Value will be only Scrap Value.
5. Potential Value :
When the property is capable of fetching more return due to it’s alternative use or by advantageous planning or providing development works then that value of property is called as Potential Value.
6. Sentimental Value :
When the property is sold or purchased at the higher value than the market value due to sentiments of the owner or the purchaser of the property is called as Sentimental Value. The main causes for Sentimental value are as follows :
- The owner may be very much attached to the property so he/she shall demand fancy price.
- The situation and the class of the property may suit a particular prospective purchaser which may be ideal for his/her purpose and may have special value to him/her.
- If the property is put on for sale and 2 prospective purchasers are determined to outbid then definitely the value of that property will reach higher than the existing market value.
7. Speculation Value :
When the property is purchased so as to sell the same at profit after some duration, the price paid is known as Speculation Value. For example, If Government is planning for some project or construction of new road or expansion on existing road from a particular area then that area gains more value from actual and market value and the speculators always buys such property low cost and sell it again after some duration. The value at which he purchases the property is called as Speculation Value.
8. Distress Value :
If the property is sold at lower price than that which can be obtained for it in open market is called as Distress Value. This may be due to various reasons which are mentioned below.
- Financial crisis for vendor due to which he/she sells the shop or property at very low price.
- Panic due to Riots, Earthquake etc.
- Quarrel among the partners.
- Sentimental reasons.
9. Accomodation Value :
Small strips or land cannot be developed independently due to their restricted length, depth and number of purchasers of such property are very less. This strips can only be sold to the adjacent land owners who may be offering only low price. This value is called as Accomodation Value.
10. Rateable Value :
Rateable value is the net annual letting value of a property, which is obtained after deducting the amount of yearly repairs from the gross income. Municipal and other taxes are charged at a certain percentage on the Ratable Value of the property.