The capital asset pricing methodologies should be identified using the codes listed below.
Code | Pricing method | Description |
|---|---|---|
1 | Cost price | The price the seller originally paid for the asset, including ancillary costs such as freight or handling. |
2 | Directors valuation | A pricing method that is based on the directors' opinion of an asset's value, and not on any of the other methods listed in codes 1 to 8. |
3 | Discounted cash flow | A pricing method where the price of an asset is based on the discounted cash flow at the time of acquisition or disposal. |
4 | Independent valuation | A pricing method by which a suitably qualified person, acting at arm's length to both the buyer and seller, assesses the value of an asset. |
5 | Nil consideration | – |
6 | Quoted market price | A price quoted on a public listed market, such as a public stock exchange, or commodities market. |
7 | Written-down value | A pricing method based on either the taxation 'adjustable value' or accounting residual value after depreciation has been allowed. |
8 | Other methods | Any other pricing method that is not mentioned in Appendix 5. |
The above pricing methods may not provide an arm's length price under all circumstances. The above examples are not an exhaustive list.
Continue to: Appendix 11: Capital value of a restructure
Return to: Appendixes for the IDS