LEARNER’S STUDY GUIDE
Apply technical knowledge and skill
to value movable and immovable
assets for insurance and risk
financing
(15012)
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Contents
Instructions to the learner
2
UNIT 1
Describe the different types of valuation that are applied to movable and
immovable assets (SO1)
6
UNIT 2
Determine the inventory of movable and immovable assets of an entity
(SO2)
17
UNIT 3
Conduct a site inspection to value an immovable asset (SO3)
27
UNIT 4
Examine documentary evidence in order to valuate movable assets
(SO4)
30
Answers to self-tests
33
Addendum 1
36
Addendum 2
38
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Instructions to the learner
Introduction
Welcome
Welcome to the learning intervention that deals with the
application of technical knowledge and skill to value movable
and immovable assets for insurance and risk financing.
This learning intervention forms part of a Level 4 Skills
Programme - Apply technical knowledge and skill to value
movable and immovable assets for insurance and risk financing,
which enable you to meet the minimum requirements to be “fit
and proper” in terms of the Financial Advisory and Intermediary
Services (FAIS) Act 37 of 2002 .
Purpose of this
learning
intervention
This learning intervention will provide you with the knowledge
and skills to provide insurance solutions by applying technical
knowledge and skill to value movable and immovable assets for
insurance and risk financing.
Overall
outcomes
By the end of this learning intervention, you will be capable of:

Determining the inventory of movable and immovable assets
of an entity.

Conducting a site inspection to value an immovable asset.

Examining documentary evidence to valuate movable
assets.
Target audience
This learning intervention is intended for learners who manage
asset risk in insurance and other organisations. It will be useful
for risk management generalists, managers of small businesses,
insurance surveyors and loss adjusters.
Delivery
medium
This training will take place in the form of self-study. In other
words, you are required to work through this self-study guide
and complete the included activities. The activities are
comprehensive, practical and experiential in nature. They are
based on “real work” where learners work with real workplace
scenarios and case studies.
Prerequisites
Learning assumed to be in place

Learner’s roles
and
responsibilities
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You should be competent in Communication, Mathematical
Literacy, and Financial Literacy at NQF Level 3.
You are required to:

work through this self-study guide;

complete activities;

ask for guidance and support when required; and
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing

Introduction to
this self-study
guide
complete the assessment.
Applying technical knowledge and skill to value movable and
immovable assets for insurance and risk financing is the central
theme of this training and is discussed in detail in this self-study
guide.
This guide makes use of icons to guide you in your learning
process below is a description of these icons:
Icon
Meaning
Icon
Meaning
Self-tests
and activities
Assignments and
assessments
Study
Outcomes
Read
Action verbs
This guide uses action verbs in its learning outcomes. Action
verbs tell you what you must DO.
Action verb
Explanation
Accessing
The ability or right to approach, enter, exit,
communicate with, or make use of
Describe
Show by clarifying the scenario
Explain
Write in your own words to make
understandable.
Identify
Ascertain the origin, nature or define
characteristics
Illustrate
To clarify, as by use of examples or
comparisons
Interpret
To explain the meaning of:
Validate
To give evidence for.
Valuate
To set a value for; appraise
The diagram below illustrates the broad process to follow when
applying technical knowledge and skill to value movable and
immovable assets for insurance and risk financing and will also
illustrate how the self-study guide is structured.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Apply technical knowledge and skill to value movable and immovable assets for insurance and risk
financing (15012)
UNIT
STUDY
READ
SELF-TEST/
ACTIVITY
ASSESSMENT
Start
here
UNIT 1/SO1
Describe the
different types
of valuation that
are applied to
movable and
immovable
assets.
UNIT 2/SO2
Determine the
inventory of
movable and
immovable
assets of an
entity.
The outcomes for this unit
The content of units 1.1-1.7
Complete Self-test 1
The outcomes for this unit
The content of units 2.1-2.7
Complete Self-test 2
UNIT 3/SO3
Conduct a site
inspection to
value an
immovable
asset.
The outcomes for this unit
The content of units 3.1-3.2
Complete Self-test 3
UNIT 4/SO4
Examine
documentary
evidence in
order to valuate
movable
assets.
The outcomes for this unit
The content of units 4.1-4.2
Complete Self-test 4
Start preparing for
your final assessment
Page 1
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Unit standards
The overall outcomes and specific outcomes of this learning
intervention are aligned with registered Unit Standard 15012.
This means that if you are able to demonstrate competence in
the learning outcomes, which are aligned with the specific
outcomes of the unit standard you will qualify for credits, which
will contribute towards the 120 credits required for a national
certificate at Level 4.
If you are unable to demonstrate competence, you will not obtain
any credits for the unit standard.
This learning intervention is aligned to the following unit standard
as illustrated in the table below:
Unit standard title
Unit
Standard
Number
NQF
level
Number
of
credits
Apply technical knowledge and
skill to value movable and
immovable assets for
insurance and risk financing
15012
4
3
This means a total of three credits towards a national certificate.
How is this selfstudy guide
made up?
This self study guide has four units each unit corresponds with a
specific outcome (SO) as indicated in the SAQA documentation
(Addendum 2). Each unit has a number of sub-units, these subunits correspond with the assessment criteria (AC) as indicated
in the SAQA documentation.
Note: SO1AC1 refers to Specific Outcome 1 Assessment
Criterion 1.
Assessment
In order to obtain the three credits for Unit Standard 15012, as
discussed previously, you must provide evidence of your
competence after working through this self-study guide.
Providing evidence of your competence will occur during the
assessment process. The laid down policies, procedures, and
related issues regarding assessments will be explained to you
before the assessment takes place. You will also be given an
overview or instructions on how the assessment will take place,
what evidence you must produce, how you must prepare
yourself, etc.
A qualified assessor or your line manager will guide and support
you throughout this process.
Our wish to you
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Everything of the best in your studies. Enjoy every moment that
you spend studying. It is time well spent in making sure of your
future.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
UNIT 1
Describe the different types of valuation that are
applied to movable and immovable assets (SO1)
After completion of Unit 1, you should be able to do the
following:
Outcomes for
this unit

Explain the reasons why it is necessary to value movable and
immovable assets and give an indication of the financial
consequences of incorrect valuation. (AC1)

Explain with examples the concept of market value. (AC2)

Explain with examples the concept of insurable value. (AC3)

Explain with examples the concept of book value. (AC4)

Explain with examples the relationship between market value
and "willing seller-willing buyer". (AC5)

Explain with examples the relationship between insurable
value and terms of indemnity offered by the insurer. (AC6)

Illustrate the indemnities offered by insurers graphically.
(AC7)
Study the material for each sub-unit before moving on to the
activities.
1.1
Reasons why it is necessary to value movable
and immovable assets are explained and an
indication is given of the financial
consequences of incorrect valuation (AC1)
Worth
What are you worth? What is a business worth? These are
questions asked by everyone. How do you place a value on your,
or your company’s, worth?
You could look at the credit balance in the bank account, or
savings facility created, or you could attempt to value the assets.
Valuing assets involves understanding what assets are. There
are basically two types of assets: those that are incapable of
being moved and those that can be moved.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Asset
What is an asset? The Oxford Concise English Dictionary
defines an asset as follows:

Useful or valuable quality

Property and possessions, esp. regard as having value in
meeting debts, commitments, etc.

Any possession having value
So an asset can be anything of value. You have certain assets in
the form of your knowledge, clothing, and furniture. A business,
likewise, has many forms of assets, such as its employees,
intellectual knowledge, stock, patents, furniture, machinery,
vehicles, and premises (either owned or rented).
This Assessment Criterion requests that we explain the reasons
why it is necessary to value certain assets, and what the
consequences would be if this valuation is incorrect. So we must
now understand what is meant by movable and immovable
assets.
Immovable
asset
Immovable assets are assets that are incapable of being moved,
or can be moved with difficulty. Examples would be buildings and
machinery. However not all items of machinery are immovable.
Movable asset
Movable assets are those assets that can be moved with ease,
such as money, furniture, stock, and vehicles. Movable assets
can also include items of machinery, such as mobile plant i.e.
generators, cranes, compressors.
Worth of a
business
For what reason is it necessary to value the assets of a
business? There are many reasons, but the most important one
being to establish the worth of the business to stakeholders and
financiers. A stakeholder is the entity (person or organisation)
that has invested money in the business. The financier is the
entity (person or organisation) who has lent money to the
business. The financier could be the bank, in the form of a credit
facility, or a lending organisation that has paid for something that
the business has agreed to pay back in set instalments (such as
a hire purchase agreement for a vehicle).
Repaying
facility
Before a business can secure a credit or loan facility, they must
prove that they are capable of repaying the amount of the credit,
or loan, facility in the time agreed. Financiers will therefore need
to make sure that the facility provided is capable of being paid
back. So the financiers undertake a valuation of the assets and
establish the net worth of these assets, after deducting any
outstanding loans provided to purchase the assets. These
outstanding loans are entitled liabilities. Liabilities are not
pertinent to this Assessment Criterion, but are the debts of the
asset owner pertaining to the asset, such as the balance
outstanding on the vehicle purchase agreement.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Incorrect
valuation
Should the valuation of the assets (both movable and
immovable) be incorrect, the financier could suffer the loss of the
financial facility provided. The condition of average may apply
resulting in the settlement by the insurance company being
reduced accordingly. This could result in the business closing
down with the resultant sale of the assets which may not provide
sufficient finance to repay the facility provided.
1.2
The concept of market value is explained with
examples (AC2)
In Unit 1.5 (AC5), we will discuss the concept of “willing sellerwilling buyer”, but now we will establish what is meant by “market
value”.
Second-hand
goods
How much would you pay for a 2000 model 54 cm second-hand
television? R200.00, R500.00, or even R1 000.00? How much
do you think the retail seller would want for this television?
R200.00, R500.00, or even R1 000.00? Again, how much do you
think the retail seller paid for this television? R100.00, R250.00,
or even R500.00?
Market value
A market value is generally referred to as the price eventually
paid for the article. So the 2000 model 54 cm television would
probably have a market value of R500.00.
How did we arrive at this value? New 54 cm televisions can be
purchased for as little as R1 000.00. So a second-hand television
should be able to be purchased for less than R1 000.00, and
then again, the year and condition would dictate what you may
feel is a reasonable price to pay.
Supply and
demand
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Market values are partly dependant on the number of similar
items available and the demand for the item concerned. If 54 cm
televisions are no longer available, as new, but the demand for
such a size is strong, the market value could well be R1 000.00.
But if the supply of 54 cm televisions is so large that some
retailers are selling them for R750.00, then the market value
could well reduce to R200.00. This is called “supply and
demand” and would have an effect on the market value of any
article being offered for sale. Other factors that have an effect on
the market value of an article would be inflation, foreign
exchange, labour costs, local industry protections and obviously
the cost price of a new article.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Immovable
assets
When looking at immovable assets, the valuator must establish
the supply and demand situation for the asset. In addition, the
valuator must establish the availability of similar assets. If the
asset is a building, then is the building suitable for a large
number of purchasers and in an area that is expanding or is in
demand? If so, the market value could be relatively high since
the building could be sold quickly and at a high price. The market
value would then be considered high. Conversely, if the building
is fit for very few purchasers and in an area that has no appeal or
is in low demand, the building could be considered of low market
value. In addition the valuator must note the condition, location,
use, design, age and construction materials used.
Condition
The condition of the article offered for sale is also a factor that
plays a part in the establishment of the market value. If the
condition is poor, then it makes very little difference what the
supply and demand is. However, if the condition is poor but there
is a demand but very few suppliers, then the condition may have
very little effect on the market value.
1.3
The concept of insurable value is explained
with examples (AC3)
Insurable
interest
Insurable value is directly linked to “insurable interest”. What is
insurable interest? The definition of insurable interest was
provided in the South African case Littlejohn v. Norwich Union
Fire Insurance Society Ltd. 1905 TH 374 as follows:
… a man is interested in a thing to whom advantage may
arise or prejudice from the circumstances which may
attend it.
Insurable interest can also be more simply defined as follows:
A person can only have an insurable interest in anything that, by
its loss or damage, would cause them financial loss, or if an
event takes place that results in a third party being able to claim
from them, in a court of law, financial compensation.
This Assessment Criterion requires that we understand the
concept of insurable value. Now that you understand what
insurable interest is, we can establish what insurable value could
be.
Land and
improvements
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Looking at a client’s premises, what would you consider to be the
subject of insurable interest? Considering the definition above,
only the improvements to the land (the building, roads,
pavements, lights, etc.) can be insured. The land itself has no
means of being lost or damaged in the normal scheme of things.
So the insurable value would be restricted to the land
improvements, and not the land.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Movable assets
So, when valuing fixed assets for insurance purposes, the land is
not taken into consideration. Movable assets are not subject to
the same situation. Since these assets can be moved at any time
without any difficulty, there is no reason to reduce the valuations
when considering the insurance value of these assets.
1.4
The concept of book value is explained with
examples (AC4)
Book value
Book value is the value of the asset in the financial
books/records of the business. The income tax laws allow a
business to reduce the value of its assets over the
expected/reasonable period of time that the assets can be
expected to last. It is not required that you understand how the
income tax laws operate, but for the purposes of this
Assessment Criterion, we shall use a four-year period for
movable assets and a twenty-year period for immovable assets.
Income tax
Movable asset
The client purchases a machine for R100 000 in 2002. This is the
insurable value and so happens to be the new price value. Since
the income tax laws allow the client to reduce the value by 25%
per year, the “book value” of this asset becomes R50 000 in the
year 2004. Income tax law states that the book value must be
reduced calculated on the original purchase price. However, the
insurable value remains at R100 000, or could even increase if
the insurance policy has been arranged on a new value basis.
Immovable
asset
The client purchases a factory building for R1 million in 2002.
This would not necessarily be the insurable value since in the
purchase price, the client has also purchased the land. So the
insurable value could be, say, R750 000. In 2004, the book value
of this property would be R800 000, but again, the insurable
value would be either R750 000 or slightly more if the insurance
policy has been arranged on a new value basis.
Book value has no bearing on the insurable value and very little,
if anything, on the actual value of the asset.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Financial
reports
When businesses prepare their financial reports, they must
record the book value of all the assets of the business. These
asset values are, therefore, used by financiers to calculate the
value of the business. A financial report is a picture of the
financial position of the business at a particular date. The asset
values recorded are in terms of the income tax laws and,
therefore, accepted as a reasonable guide as to the true value of
the business. However, before any credit facility is calculated, a
full valuation of the movable and immovable assets of the
business must still be undertaken.
Example
R100 000 less 20% per year
1 year = 20%
Answer = 80% of R100 000 = R80 000
1.5
The relationship between market value and
"willing seller-willing buyer" is explained with
examples (AC5)
Willing seller
The concept of a “willing seller” should not cause you any
misunderstanding. Obviously if someone is prepared to sell
something, he is a willing seller. The concept of a “willing buyer”
is a little different.
Willing buyer
A willing buyer is someone who has accepted the offer to sell
submitted by the seller. When you purchase something from a
shop, you would be considered a “willing buyer”. The shop owner
is considered a “willing seller”. The term “willing” is the
agreement as to the price wanted and paid for the article when
both these prices are the same.
Law of contract
Sellers and buyers enter into, what is termed, a contract of sale.
The law of contract requires a number of factors to be present at
the time of concluding the contract.
You need to be aware of the following main aspects for a
contract to be legally binding:

An offer and an acceptance of the offer must be present.

The seller is offering the article for sale at a certain price.
That would be the offer.

The buyer then agrees to purchase the article at the price
offered. That is the acceptance.

The contract is then binding at law.
We have discussed what the “market value” is, and we have
explained the concept of a “willing seller-willing buyer” above.
Now we need to combine these terms to establish the
relationship.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Offer to do
business
Once the seller has offered the article for sale, there is no
guarantee that a buyer will purchase the article at that price.
Even an advertised sale price is still an offer to do business. Only
when a willing buyer agrees to pay a price acceptable to the
seller is a contract concluded. Obviously the buyer would have
agreed that the price he has paid (or counter offered to pay) is a
market related price, hence, a reasonable market value.
1.6
The relationship between insurable value and
terms of indemnity offered by the insurer is
explained with examples (AC6)
In Unit 1.3 (AC3), you learnt about insurable value and how this
is directly related to insurable interest. This assessment criterion
requires you to establish the relationship between insurable
value and indemnity offered by the insurance company.
Indemnity
What is “indemnity”? In the UK Court case Castellain v. Preston
[1883] 11 QBD 380 CA, indemnity, in regard to a fire claim, was
defined as follows:
A fire policy is a contract of indemnity and of indemnity only and
... this ... means that the insured ... shall be fully indemnified but
never more than fully indemnified.
The Oxford Concise English Dictionary defines the word
“indemnity” as follows:
compensation for loss incurred, security against loss
In the short-term insurance industry, we refer to the word
“indemnity” to mean placing the insured in the same financial
position he was in immediately before the loss or damage he
suffered. The insured is not allowed to make a profit out of the
claim.
Insurance
company
options
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All short-term insurance policies state that the insurance
company has the option to settle any claim by making a payment
to the insured or by repairing, replacing, or reinstating the
property lost or damaged by the insured events. We now need to
establish the different forms of indemnity available to the
insurance company and the basis of valuation of the property
that has suffered the loss or damage.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Valuations
The basis of valuation of the property is the insurable value. This
could be the original purchase price, the market value, or the
new value. Irrespective of the basis of valuation, the insurance
company will never spend more on the indemnity than the policy
value or the direct financial loss suffered by the insured,
whichever is the lower figure.
The insurance company rarely pays the insured a sum of money
to indemnify him/her for any loss. Losses up to R5 000 are
sometimes paid out, but few losses are valued so low. So we are
left with
Stock
replacement

repairing the property (as in respect of vehicles),

replacing the property (as in respect of a destroyed
television), or finally

reinstating the property (as in the case of re-building a
damaged section of a building).
Insurance companies offer insureds many different bases of
insuring. Stock is usually insured on a replacement basis. This
means that the insurance company will compensate the insured
by paying the invoice value, from suppliers, of stock
replacement.
Machinery and buildings can be insured for their current
replacement cost or the replacement cost immediately before the
termination of the policy period of insurance. This is known as
insuring on either a Day 1 or a Day 365 basis, respectively.
Day 1
The Day 1 basis requires that the policy be amended to allow for
an escalation clause providing that the Day 1 value is correct.
This clause increases this Day 1 value by a set percentage to
allow for any inflation till Day 365 (the termination of the
insurance policy period of insurance).
Day 365
The usual method is to insure on a Day 365 basis. This method
requires that the insured estimates the rebuilding value on Day
365 of the policy.
Agreed value
An agreed value basis is not often used. This method of insuring
is more applicable to articles that cannot be repaired or replaced
(reinstated included) today. An example would be antiques,
items of art, paintings by the old masters, stained glass windows,
or vintage vehicles. A valuation is undertaken by a specialist in
valuing the article concerned.
Depreciated
value
Depreciated value is usually termed “market value”, which was
discussed in Unit 1.2 (AC2). If a Day 1 or Day 365 basis of
insurance has not been selected, the insurance policy is then
covering the article for the depreciated value, or market value.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Under
insurance
The insurable value often dictates the method of indemnity. If the
property insured has been undervalued, then the insurance
company may offer to pay a proportion of the repair,
replacement, or reinstatement costs requiring the insured to
make up the difference himself. This is known as the application
of the condition of average.
Condition of
average
The condition of average states that if, at the time of a claim, the
policy value (sum insured) is less than the true value (value at
risk), then the insured shall be responsible for a proportional
amount of the claim as the policy value bears to the true value.
The equation is as follows:
Sum insured
Value of loss

Value at risk
1
If the property has been undervalued, you need to know why and
by whom. Valuations that are undervalued could result in the
valuator having to make up any under-insurance settlement.
Asset valuators, therefore, are constantly at risk if their
valuations are used to value an insurance policy. Hence,
valuators make various statements concerning the basis upon
which they have prepared their valuations and the date the
valuation was undertaken.
1.7
The indemnities offered by insurers are
illustrated graphically (AC7)
Considering that the insurance policy allows the insurer to settle
any claim by paying out in money, repairing, replacing or
reinstating the property lost or damaged the indemnity, to place
the claimant in the same financial position they were immediately
before the event, is entirely up to the insurer. Obviously the
insurer will select the most suitable, and economical, method to
achieve the indemnity.
Many factors need to be considered by the insurer. If they pay
out in money, will the insured, clients, use this money to actually
fix the damage? If they repair, will the repairs be acceptable and
100% in order to satisfy the term indemnity? Will the repairs be
carried out in a shorter time than their option of replacing or
reinstating?
By selecting to replace, will the replacement undertake the same
activity as the damaged item. Reinstatement is to re-build or
replace the original item with a similar item that is not more
extensive than the original item when it was new. The reinstated
item must at least achieve the same objectives as the original
item.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Time is the governing factor that the insurer must consider. Time
converts into money and any extended period of time to achieve
indemnity could have a serious effect on the financial well-being
of the business. So insures usually enter into discussions with
the claimant, via the Loss Adjuster, to establish the most
economical method of achieving indemnity.
The following is an indication of the factors that the insurer must
take into consideration, converted into a graphic illustration:

Time to complete reinstatement indemnity, say 6 months.

Affect on the business over this 6 month period could be
a loss of 10% of income.

Time to complete replacement indemnity, say 4 months.

Affect on the business over this 4 month period could be
a loss of 5% of income.

Time to complete repair indemnity, say 2 months.

Affect on the business over this 2 month period could be
a loss of 2% of income.

Time to complete payment in money indemnity, say 1
week.

Affect on the business over this 1 week period could be
nothing, if the claimant uses the money for the purpose
intended.
REINSTATEMENT
Loss of income
Cost of
reinstatement
R2 000 000
R1 000 000
REPLACEMENT
Loss of income
Cost of replacement
R1 000 000
R750 000
REPAIRS
Loss of income
Cost of repairs
R500 000
R500 000
PAYMENT
Value of payment
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R500 000
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
1. Give one example of why a valuation may be required by a
bank before they provide financial assistance to a business
entity.
Self-test 1
2. Explain in your own words what you understand by the term
‘willing seller-willing buyer’.
3. Explain in your own words what you understand by the term
‘insurable interest’.
4. Explain ‘book value’.
5. Explain in your words, your understanding of the difference
between ‘market value’ and ‘willing seller-willing buyer’.
6. Explain what is meant by the word ‘indemnity’.
Competency
Competency
check and
progress
indication
Version 1 2016/03/06
Check
SO1
I can explain the reasons why it is necessary
to value movable and immovable assets and
give an indication of the financial
consequences of incorrect valuation.

AC1
I can explain with examples the concept of
market value.

AC2
I can explain with examples the concept of
insurable value.

AC3
I can explain with examples the concept of
book value.

AC4
I can explain with examples the relationship
between market value and "willing sellerwilling buyer".

AC5
I can explain with examples the relationship
between insurable value and terms of
indemnity offered by the insurer.

AC6
I can illustrate the indemnities offered by
insurers graphically.

AC7
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
UNIT 2
Determine the inventory of movable and
immovable assets of an entity (SO2)
After completion of Unit 2 you should be able to do the
following:
Outcomes for
this unit

Explain with examples the concepts of movable and
immovable assets. (AC1)

Accessing the information required to value immovable
assets with reference to the category of construction
standards for manufacture or production. (AC2)

Identify potential sources of information for
immovable assets for three different indices. (AC3)

Identify potential sources of information for valuing movable
assets for three different indices. (AC4)

Explain with examples the impact of the fluctuation in indices
on the value of an inventory. (AC5)

Describe and valuate the immovable items in an inventory
using current trade indices. (AC6)

Describe and valuate the movable items in an inventory
using current trade indices. (AC7)
valuing
Study the material for each sub-unit before moving on to the
activities.
2.1
The concepts of movable and immovable
assets are explained with examples (AC1)
Asset register
Businesses usually prepare what is entitled an asset register.
This register records details about the assets as follows:

Date of purchase

Description of asset

Price paid

Book value
This is to assist the business in applying the book value to the
taxation levy to be paid to the Receiver of Revenue at the end of
each financial year.
Study the example of an asset register in Addendum 1
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Asset
What is an asset? The Oxford Concise English Dictionary
defines an asset as follows:

Useful or valuable quality

Property and possessions, esp. regard as having value in
meeting debts, commitments, etc.

Any possession having value
So an asset can be anything of value. You have certain assets in
the form of your knowledge, clothing, and furniture. A business,
likewise, has many forms of assets, such as its employees,
intellectual knowledge, stock, patents, furniture, machinery,
vehicles, and premises (either owned or rented).
This assessment criterion requests that we explain the reasons
why it is necessary to value certain assets, and what the
consequences would be if this valuation is incorrect. So we must
now understand what is meant by movable and immovable
assets.
Immovable
asset
Immovable assets are assets that are incapable of being moved,
or can be moved with difficulty. Examples would be buildings and
machinery.
Movable asset
Movable assets are those assets that can be moved with ease,
such as money, furniture, stock, and vehicles.
Worth of a
business
For what reason is it necessary to value the assets of a
business? There are many reasons, but the most important one
being to establish the worth of the business to stakeholders and
financiers. A stakeholder is the entity (person or organisation)
that has invested money in the business. The financier is the
entity (person or organisation) who has lent money to the
business. The financier could be the bank, in the form of a credit
facility, or a lending organisation that has paid for something that
the business has agreed to pay back in set instalments (such as
a hire purchase agreement for a vehicle).
Repaying
facility
Before a business can secure a credit or loan facility, they must
prove that they are capable of repaying the amount of the credit,
or loan, facility in the time agreed. Financiers will therefore need
to make sure that the facility provided is capable of being paid
back. So the financiers undertake a valuation of the assets and
establish the net worth of these assets, after deducting any
outstanding loans provided to purchase the assets. These
outstanding loans are entitled liabilities. Liabilities are not
pertinent to this assessment criterion, but are the debts of the
asset owner pertaining to the asset, such as the balance
outstanding on the vehicle purchase agreement.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Incorrect
valuation
Should the valuation of the assets (both movable and
immovable) be incorrect, the financier could suffer the loss of the
facility provided, because if the business ceases to operate, for
whatever reason, the resultant sale of the assets may not
provide sufficient finance to repay the facility provided.
2.2
The information required to value immovable
assets is accessed with reference to the
category of construction standards or
manufacture or production (AC2)
Market value of
land
Land has a market value related to what price is being paid for
land in the area. Two other methods of valuing land are as
follows:
Building
construction

Establish the municipal value as reflected on the Municipal
Valuation Role (upon which the municipality charges its
rates).

Investigate the prices paid for land as registered in the Deeds
Office, information which is not readily available to valuators,
especially if very few erfs (stands) have been sold recently in
the area concerned.
Buildings, on the other hand, are easier to assess. The valuator
notes the size of the building(s), the height, building material
used for the walls and roof, the type of foundation(s), whether a
basement is involved, whether the land has been “cut and filled”,
and the slope of the ground. “Cut and filled” refers to having to
dig and use the ground taken out to increase the level of the
ground elsewhere to create a level upon which the structure is
built. The filled section must be compacted to prevent any normal
wash away from rainstorms. The internal walls are checked to
establish whether a single- or double-brick method has been
used to separate the structure into compartments. Blocks of
domestic dwellings must have double-brick walls between each
dwelling, but single-brick walls internally in the dwelling. Any area
designated to involve a heat process (such as a kitchen in a
dwelling) must have a double-brick wall separating it from the
rest of the structure.
Certain manufacturing concerns require that sections be totally
separated, requiring a double-brick wall to be erected. These
internal brick walls can have an effect on the building costs and
consequently on the valuation.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Machinery use
Machinery is valued by establishing the name of the nearest
supplier and their estimate as to the final cost of installing the
machine concerned.
However, with the constant change in technology, some
machines become obsolete, and any replacement machine may
involve a change in production systems. This would have a direct
effect on the value of the machine.
If the machinery is used for a specific purpose, such as the
manufacture of swimming pool chlorine, it may be pertinent to
establish the cost of purchasing a factory system from a
business that no longer manufactures swimming pool chlorine.
This method is not usual, but is undertaken when manufacturing
systems change and whole factories become available on the
used machinery market. Coal boilers are not readily available for
domestic dwellings, although in some countries, the use of coal
boilers is still more economical than electrical domestic geysers.
Identify
methods
The following sources of information will enable you to identify
methods of establishing the value of land, buildings, and different
machines.
Land
The size, use, and slope of the ground have a direct bearing on
the value of land. Valuators apply this information to the
Municipal Valuation Role, prices paid at auctions, average
records of the Deeds Office, and sale prices recorded by estate
agents. Land values are market value related.
Buildings
The size, use, and facilities provided by the building structure,
and the method of construction are all factors that have a direct
bearing on the valuation. However, building structures still have a
minimum building construction rate since labour costs are
regulated by labour laws. Cement, bricks, and steel usually have
a similar purchase price throughout the country, but the transport
costs to the building site may increase the final price
dramatically.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Machinery
2.3
Manufacturing concerns tend to utilise machines that have a
universal application. A lathe is a fairly universal machine, but
the size and speed of the machine will dictate whether the lathe
is unique, or readily available. The valuator needs to establish
the following:

Manufacturers name

Country of origin

Model and series number

Capacity of the machine

Any other information available from the manufacturer’s
identification plate stamped on the machine

Costs of importation.

Local transportation costs to the premises

Customs and import duty

Costs of erection, testing and commissioning
Potential sources of information for valuing
immovable assets are identified for three
different indices (AC3)
Sources that can be used to value immovable assets, bearing in
mind that these would be those assets that can not be moved, or
can be moved after dismantling, could be a property agent,
machinery/equipment supplier or builder/supplier. Some property
agents also have the facilities to value machinery/equipment and
would be in a position to supply a total value of all the immovable
assets in one report.
2.4
Potential sources of information for valuing
movable assets are identified for three different
indices (AC4)
Market value
Valuation of movable assets is usually undertaken on a market
value basis. No movable asset has a value greater than the
“willing seller-willing buyer” basis. Machinery may be an
exception to this rule, but most movable machinery has a value
based on the same “willing seller-willing buyer” method.
2.5
The impact of the fluctuation in indices on the
value of an inventory is explained with
examples (AC5)
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Currency
changes
Fluctuation in indices usually occurs due to changes in the value
of the currency, measured against the US dollar, euro, or pound
sterling. Since a large proportion of South Africa’s assets are
imported, so is inflation. A secondary reason for any fluctuation
in indices is the cost of labour. When considering the costs
associated with building, about one-third is made up by the cost
of labour. Bricks, woodwork, and steel items all involve a large
labour component in the pricing.
Labour costs
Increases in labour costs have a direct effect on the final cost of
the asset. The manufacturing sector in South Africa is relatively
labour intensive, as is the installation cost. Vehicles, furniture,
electronic equipment, and machinery all rely upon labour to
complete the final product.
A valuator must be fully aware of all currency fluctuations,
particularly in the yen, dollar, euro, and pound. Any increases in
labour costs must be built into the final valuation. The valuator
needs to have access to industry indices and monitor the
countries inflation rate to be able to calculate the current cost of
replacing the asset concern.
2.6
The immovable items in an inventory are
described and valuated using current trade
indices (AC6)
Land
When applying indices to immovable assets, the value of the
land is not taken into consideration. Land is regulated by market
forces, as explained in Unit 2.2 (AC2). Therefore, only
improvements to land can be valued and adjusted by trade
indices. Machinery, such as building elevators (lifts), is not
subject to only one trade index since, as explained in Unit 2.5
(AC5), the currency fluctuation, inflation rate in the country of
origin, and local labour costs all have a major impact on the final
installation cost of the machine.
BER
In South Africa, we are provided with various trade indices by the
Bureau for Economic Research (BER) of the University of
Stellenbosch. Quarterly analyses of building and construction
activity reports are supplied to contributing organisations to
enable them to apply indices to historic values. These
publications are copyrighted, but below, we supply an example of
the information supplied to give you an indication of the changes
in building costs over a five-year period.
Assume that a building originally cost R1 million in 1998. As at
the year 2003, the rebuilding costs would have escalated to R1
486 040, a 49% increase as measured by this bureau. This
calculation has been arrived at by using the BER’s “Building Cost
Index” as at the first quarter of 2004, that is:
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
BER indices
1999 increase over 1998 at 5,7%
2000 increase over 1999 at 4,0%
2001 increase over 2000 at 6,8%
2002 increase over 2001 at 15,7%
2003 increase over 2002 at 9,4%
2.7
The indemnities offered by insurers are
illustrated graphically (AC7)
Movable asset indices are subjected to various trade indices,
and therefore, it is difficult to actually identify only one index to
apply.
BER
The “BER’s quarterly analysis of building and construction
activity” does include other information that can be of assistance
when valuing movable assets. However, no single trade
publication records indices for all industries, and any indices
available from any trade publication will only reflect that particular
trade. The steel industry will not be able to supply an index on
the costs of manufacturing steel window frames nor the forging
(manufacturing) of machines. Their index would only supply the
costs of producing a ton of steel and, again, of a certain density.
Looking at the BER report, we are able to extract the
following information, which should enable the
valuator to apply a reasonable index to most items to
be valued.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
We quote extracts from the first-quarter “BER quarterly analysis
of building and construction activity”:
The world economic outlook for the remainder of
2004 is comparatively positive and evidence is
coming to the fore that the present global upswing
has become more broad based in recent months.
With both monetary and fiscal policy remaining
deeply stimulating, a real economic growth rate
around the 4% mark is predicted for 2004.
Although overall inflation remains comparatively low,
indications are that that the perceived downward drift
evident in the inflation rate over the past year could
be reversed.
Given the latest trends in inflation and the recent
release of real GDP growth data, which shows that
economic growth is proceeding at a relatively robust
pace, the Monetary Policy Committee of the Reserve
Bank has decided to maintain interest rates at current
levels.
For now, the rand continues to be underpinned by,
amongst others, positive capital flows driven by real
interest rate differentials, a weaker dollar, rising
commodity prices and the eradication of the forward
book.
However, with regard to the 2003 quarterly seasonally adjusted
annualised real growth figures, namely 0,9%. 0,5%, 1,1% and
1,3% respectively, it would appear that the tempo of overall GDP
growth is gradually increasing.
2004 indices
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From this information, we are able to predict that imported
inflation is likely to rise, as is the economic activity in South
Africa. Therefore, if the rand maintains its current dollar
conversion rate of less than R7.00 to the $1.00, the inflation rate
in South Africa is expected to remain unchanged at ± 4,0%
annually. This, therefore, translates into a labour increase of not
much more than 4,0%, and therefore, our furniture and
machinery replacement indices for 2004 over 2003 is unlikely to
be more than 4,0%. To this, the valuator must establish what the
rate was for 2003 over 2002, the year that movable assets were
purchased. For the purpose of this Assessment Criterion, we
would request that you use an index of 5,0%.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Vehicles
Vehicles are movable assets. Valuation of vehicles is directly
linked to supply and demand. Not all vehicles available on the
South African market have the same depreciation rate. Executive
vehicles tend to retain their value longer, unless the vehicle
suppliers reduce new prices drastically to sell their stock to make
way for a new model. Commercial vehicles also retain their value
providing the distance travelled is not excessive for the use to
which the vehicle is put. The valuator would normally refer to the
motor trade dealers’ digest to establish a reasonable market
value.
1. What information is recorded in a business entities asset
register?
Self-test 2
2. How important is it for the valuator to establish the
construction methods used to build a building?
3. If a valuator is valuing an item of machinery, where do you
think the valuator would go to establish the machines value?
4. When valuing an imported machine, why is it important for
the valuator to establish the inflation rate relative to the
country of origin of the machine?
5. What resource would a valuator use to establish the building
index to assist them to value a building?
Competency
Competency
check and
progress
indication
Version 1 2016/03/06
Check
SO2
I can explain with examples the concepts of
movable and immovable assets .

AC 1
I can access the information required to value
immovable assets with reference to the
category of construction standards for
manufacture or production.

AC 2
I can identify potential sources of information
for valuing immovable assets for three
different indices.

AC 3
I can identify potential sources of information
for valuing movable assets for three different
indices.

AC 4
I can explain with examples the impact of the
fluctuation in indices on the value of an
inventory.

AC 5
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Version 1 2016/03/06
I can describe and valuate the immovable
items in an inventory using current trade
indices.

AC 6
I can describe and valuate the movable items
in an inventory using current trade indices.

AC 7
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
UNIT 3
Conduct a site inspection to value an immovable
asset (SO3)
After completion of Unit 3, you should be able to do the
following:
Outcomes for
this unit

Interpret a site plan in order to identify the nature of the
immovable asset. (AC1)

Validate that the inventory on a site and findings are
communicated in a report. (AC2)
Study the material for each Unit before moving on to the
activities.
3.1
A site plan is interpreted in order to identify the
nature of the immovable asset (AC1)
Site plans are prepared by architects to show where any
construction work is to be undertaken. The site plan, lodged with
the municipality, identifies all pertinent aspects of the site, such
as:
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
Name of Owner: ACD Investments cc

Erf No.: Portion 22 of Erf 56

Suburb: Your suburb

Size of Erf: 4 000 m2

Registered use: Light industrial

Architect: XYZ Partnership Inc.

Consulting Engineers: MNO Engineers cc

Size of structures: Offices 600 m2, Balance 2 000 m2

Height of structures: Offices 4 m, Balance 8 m lofty

Services: 350 KVA Eskom, 1 000 ltrs per hour water
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Plan legion
Legion:
W = Windows
FH = Fire hydrant
SV = Stop valve
FHR = Fire hose reel
FD = Fire door
FS = Flammable store
FE = Fire extinguishers
LPG = Liquid petroleum gas
= Double-brick wall
------- = Opening in wall
= Single-brick wall
Single-story under IBR on metal supports
Site
plan
N
Study the following site plan.
W
W
W
W
FH
LPG
FHR
W
FE
FE
OFFICE
W
OFFICE
W
FD
W
FS
100 Ltrs
FE
W
FE
W
FHR
W
W
SV
Timber stocks
FIGURE 1
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
3.2
The inventory is validated on a site and findings
are communicated in a report (AC2)
A typical valuation report would be set out under subject headings,
such as:
1. Reason for the valuation.
2. Physical description of the property.
3. Municipal information (if applicable).
4. General information pertaining to the area and use of the
asset.
5. Physical attributes of the assets.
6. Terms of the valuation.
7. Actual valuation certificate.
In order to cover every aspect of the subject heading the valuator
must identify all the components of the asset, which would include:
8. The construction materials used.
9. The services supplied to the asset.
10. The distribution system pertaining to the services.
11. The safety and security systems installed.
12. The position of the services and the potential to move these
services to other positions.
13. Full description of all fixtures that form part of the asset.
14. Possible future use of the asset should the existing tenant
vacate the asset.
Valuators must submit evidence that they have identified all the
inventory items pertaining to the asset in their report.
1. Identify at least 6 pertinent aspects that appear on every site
plan.
Self-test 3
Competency
Competency
check and
progress
indication
Version 1 2016/03/06
Check
SO3
I can interpret a site plan in order to identify the
nature of the immovable asset.

AC 1
I can validate the inventory on a site and
communicate the findings in a report.

AC 2
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
UNIT 4
Examine documentary evidence in order to
valuate movable assets (SO4)
After completion of Unit 4, you should be able to do the
following:
Outcomes for
this unit

Identify and scrutinise potential evidence in order to determine
the nature of the asset. (AC1)

Value the movable asset using appropriate indices and
communicate the findings in a report. (AC2)
Study the material for each sub-unit before moving on to the
activities.
4.1
Potential evidence is identified and scrutinised
in order to determine the nature of the asset
(AC1)
Inventory
From the inventory, the valuator should have a reasonable idea as
to what assets the business has. However, the client’s inventory is
not always available, so the valuator must establish what assets
are involved. This requires the valuator to visit the site and walk
around to establish as much about the asset(s) as possible. The
original purchase price paid by the client may not have much
bearing on the actual value since the client may have purchased a
“going concern” from a past owner. A “going concern” is a
business that is in full operation at the time of sale.
Valuator’s
knowledge
The valuator must have a good working knowledge of the assets
he1 is valuating. A building valuator may not be competent to value
machinery, and vice versa. It is, therefore, vital that before a
valuator visits a site, he knows exactly what he is to value. In the
valuator’s report, he is to state the reason for the valuation and the
assets that he has inspected. The report must state the basis of
the valuation, such as the replacement value of the asset at the
date of the valuation, how he arrived at that value, and what
additional aspects he has incorporated in the valuation, such as
professional fees and VAT.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
4.2
The movable asset is valued using appropriate
indices and the findings are communicated in a
report (AC2)
There are no actual indices available to value movable assets, but
the following are reasonable guides used by valuators:

Advertisements.

Used movable asset dealers, such as furniture, equipment,
electronic components and vehicles dealers.

Specialised machinery dealers.

Specialised industry dealers.
When a valuator sets out their findings in a report they relate to
the various movable assets in subject headings, such as:

Furniture. Each item is identified and the age and condition is
stated.

Equipment. Each item is identified with its use and condition.
The date of purchase is not always relative, i.e. a heavy-duty
paper punch does not reduce in value due to its age. The
condition will set the valuation.

Electronic components. These could include PABXs,
computers, security systems including cameras, office
machines which must all be identified separately with their
date of purchase and condition.

Vehicles. Although vehicles are easier to value due to the
large number of used vehicles available. The valuator must
identify each vehicle, state the date of first registration, the
distance covered, record the maintenance activities and the
general condition.

Specialised machinery. In this instance the valuator will identify
the type of machine, make, model and general condition.

Specialised industry. The valuator will state the industry
concerned and like the machinery report, identify as much
about the movable asset as possible to assist the reader to
understand exactly what function the machinery undertakes in
terms of the industry concerned.
1. Irrespective of the information contained in the asset register,
what additional information is required by the valuator to
undertake a correct valuation?
Self-test 4
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Competency
Competency
check and
progress
indication
Version 1 2016/03/06
Check
SO4
I can identify and scrutinise potential evidence
in order to determine the nature of the asset.

AC 1
I can value the movable asset using
appropriate indices and communicate the
findings in a report.

AC 2
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Answers to self-tests
Self-test 1
1. The bank needs to know that if the business entity fails to
honour their obligation to repay the financial assistance, that
the bank can sell the asset and recover the financial facility
provided.
2. The final price paid by the buyer, and accepted by the seller, is
regarded as the market value of the article concerned.
3. A person can have an insurable interest if they stand to lose
financially by the loss or damage of the subject matter.
4. Book value is the value of the asset after depreciation allowed
by the Receiver of Revenue.
5. Only when a willing buyer agrees to purchase the article
offered for sale by a willing seller, at an agreed price, is this
price regarded as the market value. Otherwise there is no
definition of a market value.
6. Indemnity means to place the insured in the same financial
position they enjoyed immediately before the event that
caused the loss.
1. The date of purchase, description of the asset, the price paid
and the book value.
Self-test 2
Version 1 2016/03/06
2. All buildings must be constructed of materials that are suitable
for the future tenancy. Double brick walls must separate areas
involving heat, such as a kitchen in a domestic dwelling, from
the other areas of the building.
3.
Used machine agents and advertisements.
4.
When importing anything the resultant selling price of the
import includes the country of origin’s inflation rate.
5.
The BER index.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Self-test 3

Name of Owner:

Erf No.: Suburb: Your suburb

Size of Erf:

Registered use:

Architect:

Consulting Engineers:

Size of structures:

Height of structures:

Services:
1. The valuator must obtain the series reference number and if
possible the actual item number stamped on the asset by the
manufacturer.
Self-test 4
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
When a valuator sets out their findings in a report they relate to
the various movable assets in subject headings, such as:

Furniture. Each item is identified and the age and condition is
stated.

Equipment. Each item is identified with its use and condition.
The date of purchase is not always relative, i.e. a heavy duty
paper punch does not reduce in value due to its age. The
condition will set the valuation.

Electronic components. These could include PABXs,
computers, security systems including cameras, office
machines which must all be identified separately with their
date of purchase and condition.

Vehicles. Although vehicles are easier to value due to the
large number of used vehicles available. The valuator must
identify each vehicle, state the date of first registration, the
distance covered, record the maintenance activities and the
general condition.

Specialised machinery. In this instance the valuator will identify
the type of machine, make, model and general condition.

Specialised industry. The valuator will state the industry
concerned and like the machinery report, identify as much
about the movable asset as possible to assist the reader to
understand exactly what function the machinery undertakes in
terms of the industry concerned.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
References
MacGillivray, E.J. 1975. MacGillivray & Parkington on Insurance Law relating to All
Risks Other Than Marine. 6th edn. London: Sweet & Maxwell.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Addendum 1
XYZ MANUFACTURING cc
ASSET REGISTER AS AT 01/03/2002
ASSET #
DESCRIPTION
POSITION
DATE
PURCHASED
WRITE
PRICE
BOOK
DOWN
PAID
VALUE
RATE
COM/2345 IBM DESK TOP COMPUTER
GENERAL OFFICE 2002/01/25
4 500 20%
3 600
COM/2346 IBM DESK TOP COMPUTER
GENERAL OFFICE 2002/01/25
4 500 20%
3 600
COM/2347 IBM DESK TOP COMPUTER
ACCOUNTS DEPT
2002/01/25
4 500 20%
3 600
COM/2348 IBM DESK TOP COMPUTER
DISPATCH
2002/01/25
4 500 20%
3 600
COM/2349 IBM DESK TOP COMPUTER
SALES OFFICE
2002/01/25
4 500 20%
3 600
COM/2344 IBM DESK TOP COMPUTER
STOCK CONTROL 2002/01/25
4 500 20%
3 600
COM/2350 EPSON STYLUS 120 PRINTER
GENERAL OFFICE 2002/01/25
3 500 20%
2 800
COM/2351 HP LASERJET 41 PRINTER
GENERAL OFFICE 2002/01/25
5 000 20%
4 000
COM/2352 HP LASERJET 4050 PRINTER
ACCOUNTS DEPT
2002/01/25
8 000 20%
6 400
COM/2355 EPSON STYLUS 120 PRINTER
DISPATCH
2002/01/25
3 500 20%
2 800
COM/2354 EPSON STYLUS 120 PRINTER
SALES OFFICE
2002/01/25
3 500 20%
2 800
COM/2356 HP LASERJET 41 PRINTER
STOCK CONTROL 2002/01/25
4 500 20%
3 600
FUR/0045 DESK
GENERAL OFFICE 2002/01/25
1 200 20%
960
FUR/0046 DESK
GENERAL OFFICE 2002/01/25
1 200 20%
960
FUR/0047 DESK
ACCOUNTS DEPT
2002/01/25
1 200 20%
960
FUR/0048 DESK
DISPATCH
2002/01/25
1 200 20%
960
FUR/0049 DESK
SALES OFFICE
2002/01/25
1 200 20%
960
FUR/0050 DESK
STOCK CONTROL 2002/01/25
1 200 20%
960
FUR/0051 SLIDING DOOR CREDENZA
GENERAL OFFICE 2002/01/25
600 20%
480
FUR/0052 SLIDING DOOR CREDENZA
GENERAL OFFICE 2002/01/25
600 20%
480
FUR/0053 SLIDING DOOR CREDENZA
ACCOUNTS DEPT
2002/01/25
600 20%
480
FUR/0054 SLIDING DOOR CREDENZA
DISPATCH
2002/01/25
600 20%
480
FUR/0055 SLIDING DOOR CREDENZA
SALES OFFICE
2002/01/25
600 20%
480
FUR/0056 SLIDING DOOR CREDENZA
STOCK CONTROL 2002/01/25
600 20%
480
FUR/0057 TABLE
GENERAL OFFICE 2002/01/25
250 20%
200
FUR/0058 TABLE
GENERAL OFFICE 2002/01/25
250 20%
200
FUR/0059 TABLE
ACCOUNTS DEPT
2002/01/25
250 20%
200
FUR/0060 TABLE
DISPATCH
2002/01/25
250 20%
200
FUR/0082 THREE-TIER BOOKCASE
SALES OFFICE
2002/01/25
450 20%
360
FUR/0083 THREE-TIER BOOKCASE
STOCK CONTROL 2002/01/25
450 20%
360
FUR/0092 FOUR-DRAWER STEEL FILING CABINET GENERAL OFFICE 2002/01/25
750 20%
600
FUR/0093 FOUR-DRAWER STEEL FILING CABINET GENERAL OFFICE 2002/01/25
750 20%
600
FUR/0094 FOUR-DRAWER STEEL FILING CABINET ACCOUNTS DEPT
2002/01/25
750 20%
600
FUR/0095 FOUR-DRAWER STEEL FILING CABINET DISPATCH
2002/01/25
750 20%
600
FUR/0096 FOUR-DRAWER STEEL FILING CABINET SALES OFFICE
2002/01/25
750 20%
600
FUR/0097 FOUR-DRAWER STEEL FILING CABINET STOCK CONTROL 2002/01/25
750 20%
600
FUR/1001 VISITORS BLUE SLEIGH-BASE CHAIR
GENERAL OFFICE 2002/01/25
700 20%
560
FUR/1002 VISITORS BLUE SLEIGH-BASE CHAIR
GENERAL OFFICE 2002/01/25
700 20%
560
FUR/1003 VISITORS BLUE SLEIGH-BASE CHAIR
GENERAL OFFICE 2002/01/25
700 20%
560
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
ASSET #
DESCRIPTION
POSITION
DATE
PURCHASED
PRICE
PAID
WRITE
BOOK
DOWN
VALUE
RATE
FUR/1004
TYPIST BLUE CHAIR
GENERAL OFFICE
2002/01/25
500
20%
400
FUR/1005
TYPIST BLUE CHAIR
GENERAL OFFICE
2002/01/25
500
20%
400
FUR/1006
TYPIST BLUE CHAIR
ACCOUNTS DEPT
2002/01/25
500
20%
400
FUR/1007
TYPIST BLUE CHAIR
DISPATCH
2002/01/25
500
20%
400
FUR/1008
TYPIST BLUE CHAIR
SALES OFFICE
2002/01/25
500
20%
400
FUR/1009
TYPIST BLUE CHAIR
STOCK CONTROL
2002/01/25
500
20%
400
FUR/2000
EXECUTIVE OAK DESK WITH CREDENZA
MD’s OFFICE
2002/01/25
10 000
20%
8 000
FUR/2001
TWO-TIER BOOKCASE
MD’s OFFICE
2002/01/25
750
20%
600
FUR/2002
MAROON SWIVEL HIGH-BACK CHAIR
MD’s OFFICE
2002/01/25
900
20%
720
FUR/2003
VISITORS MAROON HIGH-BACK CHAIR
MD’s OFFICE
2002/01/25
800
20%
640
FUR/2004
VISITORS MAROON HIGH-BACK CHAIR
MD’s OFFICE
2002/01/25
800
20%
640
FUR/2005
VISITORS MAROON HIGH-BACK CHAIR
MD’s OFFICE
2002/01/25
800
20%
640
COM/5701
IBM DESK TOP COMPUTER
MD’s OFFICE
2002/01/25
5 500
20%
4 400
COM/5702
HP LASERJET 4050 PRINTER
MD’s OFFICE
2002/01/25
8 000
20%
6 400
FAC/2598
TESTING EQUIPMENT
FACTORY
2001/09/01
25 000
30%
17 500
FAC/3759
HIGH-PRESSURE COLD-WATER
CLEANER
FACTORY
2001/09/01
6 500
30%
4 550
FAC/2599
BOSCH ROUTER
FACTORY
2001/09/01
2 000
30%
1 400
FAC/3002
ABUS 251 WELDING MACHINE
FACTORY
2001/09/01
4 500
30%
3 150
FAC/3760
CAPRI 67 TURNING MACHINE
FACTORY
2001/09/01
55 000
30%
38 500
FAC/3004
HEAVY DUTY BOSCH LATHE (FIXED)
FACTORY
2001/09/01
140 000
30%
98 000
FAC/2560
BOMAT 987 SANDING MACHINE
FACTORY
2001/09/01
28 000
30%
19 600
ASS/0001
LAND
ERF 25
2001/04/25
125 000
10%
112 500
ASS/0002
FACTORY
ERF 25
2001/10/15
1 000 000
10%
900 000
ASS/0003
OFFICES
ERF 25
2001/11/28
250 000
10%
225 000
MOT/10003
FORD COURIER
FACTORY
2001/10/02
80 000
40%
48 000
MOT/10004
NISSAN 4 TON
FACTORY
2001/10/02
175 000
40%
105 000
MOT/10005
TOYOTA 1 TON
FACTORY
2001/10/02
85 000
40%
51 000
MOT/20001
FORD FALCON
MD
2001/03/06
300 000
40%
180 000
MOT/20002
TOYOTA TAZZ
SALES
2001/11/09
90 000
40%
54 000
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
Addendum 2
All qualifications and unit standards registered on the National
Qualifications Framework are public property. Thus the only
payment that can be made for them is for service and reproduction.
It is illegal to sell this material for profit. If the material is reproduced
or quoted, the South African Qualifications Authority (SAQA)
should be acknowledged as the source.
SOUTH AFRICAN QUALIFICATIONS AUTHORITY
REGISTERED UNIT STANDARD:
Apply technical knowledge and skill to value movable and immovable assets for
insurance and risk financing
SAQA US ID
UNIT STANDARD TITLE
15012
Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
SGB NAME
NSB
SGB Financial
Services
NSB 03-Business,
Commerce and
Management Studies
FIELD
PROVIDER NAME
SUBFIELD
Business, Commerce and Management Studies Finance, Economics and
Accounting
ABET BAND
UNIT STANDARD TYPE
NQF LEVEL
CREDITS
Undefined
Regular
Level 4
3
REGISTRATION
STATUS
REGISTRATION START
DATE
REGISTRATION
END DATE
SAQA
DECISION
NUMBER
Registered
2003-10-08
2006-10-08
SAQA
0150/03
PURPOSE OF THE UNIT STANDARD
This Unit Standard is intended for learners who manage asset risk in insurance and
other organisations. It will be useful for risk management generalists, managers of
small businesses, insurance surveyors and loss adjusters.
The qualifying learner is capable of:
immovable assets.
y.
LEARNING ASSUMED TO BE IN PLACE
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
There is open access to this Unit Standard. Learners should be competent in
Communication, Mathematical and Financial Literacy at Level 3.
UNIT STANDARD RANGE
The typical scope of this Unit Standard is:
agreed value and depreciated value in terms of day 1 and day 365.
type of construction, location and ancillary services.
UNIT STANDARD OUTCOME HEADER
N/A
Specific Outcomes and Assessment Criteria:
SPECIFIC OUTCOME 1
Describe the different types of valuation that are applied to movable and immovable
assets.
ASSESSMENT CRITERIA
ASSESSMENT CRITERION 1
1. Reasons why it is necessary to value movable and immovable assets are explained
and an indication is given of the financial consequences of incorrect valuation.
ASSESSMENT CRITERION 2
2. The concept of market value is explained with examples.
ASSESSMENT CRITERION 3
3. The concept of insurable value is explained with examples.
ASSESSMENT CRITERION 4
4. The concept of book value is explained with examples.
ASSESSMENT CRITERION 5
5. The relationship between market value and "willing seller-willing buyer" is explained
with examples.
ASSESSMENT CRITERION 6
6. The relationship between insurable value and terms of indemnity offered by the
insurer is explained with examples.
ASSESSMENT CRITERION 7
7. The indemnities offered by insurers are illustrated graphically.
SPECIFIC OUTCOME 2
Determine the inventory of movable and immovable assets of an entity.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
ASSESSMENT CRITERIA
ASSESSMENT CRITERION 1
1. The concepts of movable and immovable assets are explained with examples.
ASSESSMENT CRITERION 2
2. The information required to value immovable assets is accessed with reference to
the category of construction standards or manufacture or production.
ASSESSMENT CRITERION 3
3. Potential sources of information for valuing immovable assets are identified for
three different indices.
ASSESSMENT CRITERION 4
4. Potential sources of information for valuing movable assets are identified for three
different indices.
ASSESSMENT CRITERION 5
5. The impact of the fluctuation in indices on the value of an inventory is explained
with examples.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
ASSESSMENT CRITERION 6
6. The immovable items in an inventory are described and valuated using current
trade indices.
ASSESSMENT CRITERION 7
7. The movable items in an inventory are described and valuated using current trade
indices
SPECIFIC OUTCOME 3
Conduct a site inspection to value an immovable asset.
ASSESSMENT CRITERIA
ASSESSMENT CRITERION 1
1. A site plan is interpreted in order to identify the nature of the immovable asset.
ASSESSMENT CRITERION 2
2. The inventory is validated on a site and findings are communicated in a report.
SPECIFIC OUTCOME 4
Examine documentary evidence in order to valuate movable assets.
ASSESSMENT CRITERIA
ASSESSMENT CRITERION 1
1. Potential evidence is identified and scrutinised in order to determine the nature of
the asset.
ASSESSMENT CRITERION 2
2. The movable asset is valued using appropriate indices and the findings are
communicated in a report.
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
UNIT STANDARD ACCREDITATION AND MODERATION OPTIONS
Accreditation for this Unit Standard shall be obtained from the relevant Education and
Training Quality Assurance Body, through summative and formative assessment by a
registered assessor.
that has a Memorandum of Understanding with the INSQA
a Memorandum of Agreement with INSQA.
Training providers must be accredited by the relevant ETQA.
Moderation should include both internal and external moderation where applicable
UNIT STANDARD DEVELOPMENTAL OUTCOME
N/A
UNIT STANDARD LINKAGES
N/A
Critical Cross-field Outcomes (CCFO):
UNIT STANDARD CCFO IDENTIFYING
Learners are capable of identifying and solving problems in which responses show
that responsible decisions using critical and creative thinking have been made in
valuating moveable and immovable assets.
UNIT STANDARD CCFO ORGANIZING
Learners are capable of organising and managing themselves and their activities in
accessing the required information, determining an inventory and valuating assets
responsibly and effectively.
UNIT STANDARD CCFO COLLECTING
Learners are capable of collecting, organising and critically evaluating information in
determining an inventory, conducting on site visit and examining documentary
evidence.
UNIT STANDARD CCFO COMMUNICATING
Learners are capable of communicating effectively in reporting the findings of
valuations of movable and immovable assets.
UNIT STANDARD CCFO SCIENCE
Learners are capable of use technology effectively and critically in accessing
information electronically.
UNIT STANDARD CCFO DEMONSTRATING
Learners are capable of understanding of the world as a set of related systems by
explaining relationships between the different terms of indemnity and the financial
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SAQA Unit Standard SAQA 15012 – Apply technical knowledge and skill to value movable and
immovable assets for insurance and risk financing
consequences of incorrect valuations.
UNIT STANDARD ASSESSOR CRITERIA
N/A
UNIT STANDARD NOTES
N/A
All qualifications and unit standards registered on the National Qualifications Framework
are public property. Thus the only payment that can be made for them is for service and
reproduction. It is illegal to sell this material for profit. If the material is reproduced or
quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the
source.
Version 1 2016/03/06
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