Memorandum from the Royal Institution
of Chartered Surveyors (RICS)
CLARIFICATION OF SPECIFIC TERMS USED BY RICS
DURING THE ORAL EVIDENCE SESSION GIVEN TO THE COMMITTEE ON 8 DECEMBER
2009
Following your Committee's inquiry to clarify
a few terms which I have used during the oral evidence session
on 8 December, please find below the definitions of these
terms:
On the difference between the terms ""reasonably
competent operator" and "reasonably efficient",
the correct term is reasonably efficient operator, which
supplanted the alternative term several years ago. This follows
the terminology used by the International Valuation Standards
Board, which RICS follows. A full definition is contained within
the RICS Valuation Information Paper (VIP Number 2) in section
2.4. A copy of this document has been sent to the Committee. This
VIP is now the subject of review following the publication of
the PUBCO Forum Report.
Regarding the calculation of goodwill, it is
a complex area in all property sectors, not just for public houses.
In relation to public houses, it is covered in a specific
chapter of VIP Number 2 (chapter 3). The contents of this
document include more comprehensive detail.
15 December 2009
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