INCOME APPROACH OF VALUING PLANT AND MACHINERY 2

0

Description

The income approach is not suitable in the valuation of plant and machinery under the componentization model due to some reasons, but before I mention that, let’s define Income approach and componentization model.

Income Approach: Income approach is one of the three approaches to valuing plant and machinery which shows the present worth of the future benefits of ownership. The income approach is applied where the appraiser (Estate surveyor and valuer) wants to determine/estimate the present value/worth of future benefits which will accrue to the owner of the plant and machinery.