Determining the value of certain property can be complicated. You may not have thought much about having to valuate certain items unless you intended to sell them, but now that you are getting a divorce, you may need to know these values as part of the property division process.
Different methods can apply to valuating assets, and the type of assets involved often determine the method used. It is also common for professional appraisers and other parties to step in to use the correct method and come to a conclusion about the value.
When it comes to finding the value of personal items that you could easily replace, professionals or even you could use relatively easy valuation methods. For instance, a cost approach would simply involve determining how much it would cost to replace the item, and that cost determines its value. Even if you have items that some may consider rare, a market comparison of similar items that recently sold could determine the value.
You may need to take a revenue approach if you have items that could generate revenue in the future. This could apply to a work of art that you anticipate will increase in value over the years. It is likely that you would need a professional appraiser to determine potential revenue and value.
If you or your spouse is a business owner, the value of the business will play an important part in the property division proceedings. Of course, valuing a business can be complicated. The business profits, assets and debts could all impact the value of the business. Whether the business has increased or decreased in value over the years could also be an important detail.
On one hand, the book value method could determine the company’s value by going over the company’s bookkeeping and making necessary adjustments, or the market approach method could determine what a buyer would pay for the business and use that projection as the value of the business.
Finding the right values
As you can see, valuing assets can be a complicated endeavor, but it may prove necessary to ensure that your marital assets are divided as equally as possible during your California divorce case. You certainly do not want to end up short on the outcomes, so it may be worthwhile to work with your attorney to determine the best method of valuation for your assets and find how you can work toward favorable outcomes.