By ESV Ridwan Adebayo ADEMOLA and ESV Adewale Rufai ADEDOKUN, Ph.D
Introduction
Over the past decade, Nigeria’s public financial management system has experienced a major transformation through the adoption of the International Public Sector Accounting Standards (IPSAS). The move toward IPSAS compliance represents a deliberate effort to improve transparency, accountability, and comparability in the way government resources are recorded and reported. Among the several changes IPSAS introduced, one critical aspect is asset valuation, which ensures that public assets ranging from buildings, land, and infrastructure to equipment and vehicles are properly recognized and reported at their fair value.
However, implementing IPSAS in Nigeria has revealed that asset valuation is not merely an accounting procedure but a specialized professional exercise that requires technical, economic, and market-based expertise. This makes the role of Estate Surveyors and Valuers (ESVs) indispensable in achieving credible and realistic financial statements. As experts in the valuation of tangible and intangible assets, Estate Surveyors and Valuers bridge the gap between accounting theory and real-world asset appraisal, helping government agencies to determine true asset values, prevent misstatement of financial positions, and enhance public trust. This paper provides a practical and comprehensive discussion on the meaning of asset valuation, the framework of IPSAS policy in Nigeria, and the critical place of Estate Surveyors and Valuers in ensuring that IPSAS implementation produces transparent, reliable, and value-based reporting for effective public sector management.
Concept of Asset Valuation in the Public Sector
Asset valuation refers to the process of determining the current worth of an asset at a specific date for a defined purpose. In the public sector, valuation goes beyond financial reporting; it serves as a strategic tool for resource management, planning, and accountability. According to Ajayi (2019), valuation provides a factual and objective basis for decision-making by determining the economic worth of land, buildings, infrastructure, and other physical assets that form the wealth of the nation.
For public institutions, asset valuation performs several critical functions:
- Financial Transparency:It provides a true and fair representation of the government’s financial position, ensuring that assets are neither overstated nor understated.
- Budgetary Control and Planning: Accurate asset values help in prioritizing resource allocation and capital budgeting.
- Asset Accountability:Through valuation, idle or underutilized assets can be identified and properly managed or disposed of.
- Revenue Generation:Valuation facilitates fair pricing of government leases, concessions, and privatization programs.
- Risk Management:Valuation supports insurance, replacement planning, and loss adjustment in case of damage or obsolescence.
Given the complex nature of public assets many of which are non-revenue generating or used for public service delivery valuing them requires both technical competence and sound professional judgment. This underscores the crucial place of Estate Surveyors and Valuers in public sector asset valuation.
Overview of IPSAS and Its Adoption in Nigeria
The International Public Sector Accounting Standards (IPSAS) were developed by the International Public Sector Accounting Standards Board (IPSASB) to harmonize financial reporting practices among governments globally. IPSAS encourages transparency and accountability by promoting accrual-based accounting, which recognizes revenues, expenses, assets, and liabilities when they occur, not merely when cash is exchanged. Nigeria officially adopted IPSAS in 2014, with phased implementation across the federal, state, and local government levels. The Office of the Accountant-General of the Federation (OAGF) coordinated this transition to improve the accuracy of financial statements and align Nigeria’s public financial management with international best practices.
Key among IPSAS standards relevant to valuers are:
IPSAS 17: Property, Plant, and Equipment (PPE): requires assets to be measured at fair value, not historical cost.
IPSAS 31: Intangible Assets: covers valuation of non-physical assets like software and licenses.
IPSAS 32: Service Concession Arrangements: deals with assets used in public-private partnership arrangements.
The application of these standards demands professional valuation expertise. As Ogunba (2021) points out, accountants and auditors alone cannot accurately determine fair value without input from qualified valuers, especially for properties that lack an active market or historical purchase records. Hence, the IPSAS framework inherently creates a space for Estate Surveyors and Valuers as technical partners in financial reporting.
The Strategic Role of Estate Surveyors and Valuers in IPSAS Implementation
Estate Surveyors and Valuers occupy a strategic professional position in IPSAS-driven asset valuation because they bring market insight, technical skills, and professional ethics to the process. Their involvement spans all stages of IPSAS asset management from identification to valuation, documentation, revaluation, and advisory services.
Below are practical areas where their expertise adds tangible value:
- Asset Identification and Inventory Development: Before any valuation can occur, government assets must first be identified, verified, and catalogued. In many Nigerian ministries, departments, and agencies (MDAs), asset records are either incomplete or outdated. Valuers assist in asset verification exercises, where they physically inspect, tag, and record all properties belonging to an organization. This process involves capturing details such as asset type, location, use, acquisition date, and condition. According to Aluko (2018), many public entities discovered significant discrepancies between recorded assets and actual field assets during IPSAS transition some assets were duplicated, unrecorded, or misclassified. By involving Estate Surveyors and Valuers, these inconsistencies are corrected, ensuring accurate financial reporting and reducing opportunities for asset misappropriation.
- Asset Valuation and Measurement for IPSAS Compliance:Under IPSAS 17, entities are required to measure assets at their fair value, defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Determining fair value requires market-based valuation methodologies, which fall within the exclusive competence of professional valuers. Estate Surveyors and Valuers apply recognized valuation methods such as: Comparative Method: Used for properties where active market evidence exists (e.g., government-owned residential or commercial buildings). Income Capitalization Method: Applied to income-generating assets such as office complexes or markets. Depreciated Replacement Cost (DRC): Used for specialized assets such as schools, hospitals, and roads where there is no direct market evidence.
Their valuation reports serve as credible evidence for recording asset values in government balance sheets. As Oloyede and Adegoke (2020) emphasize, involving qualified valuers ensures objectivity, consistency, and defensibility of financial data in audits and public reviews.
- Development of Asset Registers:A well-prepared asset register is a mandatory component of IPSAS financial reporting. Valuers collaborate with accountants to prepare detailed registers that capture the description, location, identification number, acquisition date, valuation date, useful life, and fair value of each asset. An accurate asset register enables effective asset tracking, maintenance planning, and replacement scheduling. Valuers’ technical input ensures that the register is not just a list but a comprehensive management tool. It also serves as a basis for future revaluation exercises and helps in monitoring the government’s net worth over time (Iroham et al., 2020).
- Periodic Revaluation and Depreciation Assessment:Assets are not static in value; they appreciate or depreciate based on market conditions, physical wear, and functional obsolescence. IPSAS mandates periodic revaluation to ensure that asset values remain current. Estate Surveyors and Valuers play a crucial role in revaluation exercises by assessing changes in property conditions, market demand, and cost trends. They provide updated fair values that inform depreciation schedules and replacement planning. For instance, a government-owned hospital complex valued in 2015 may require revaluation by 2025 to reflect inflation, renovation, or expansion. As Ebie (2020) noted, timely revaluation not only ensures IPSAS compliance but also provides reliable data for budgeting, asset insurance, and investment decisions.
- Advisory Role in Policy Formulation and Asset Management:Beyond valuation, Estate Surveyors and Valuers serve as strategic advisers in public asset management. Their knowledge of property markets and lifecycle costs enables them to guide government agencies on how to optimize asset use and reduce maintenance burdens. They help identify redundant or underutilized assets that can be leased, redeveloped, or disposed of to generate revenue. For instance, several state governments have successfully increased internally generated revenue by converting idle government quarters into commercial leases, based on recommendations from valuers. Furthermore, valuers participate in policy formulation by advising on asset maintenance standards, performance monitoring, and data management systems. Their advisory role ensures that IPSAS implementation moves beyond compliance to genuine asset efficiency and value maximization (NIESV, 2023).
Challenges Facing Estate Surveyors and Valuers in IPSAS Implementation
While the role of valuers in IPSAS is well established, several practical challenges limit their full participation and effectiveness in Nigeria. These include:
- Limited Awareness: Many accountants and government officers are unaware of the legal and professional necessity of involving registered valuers in asset valuation processes.
- Budgetary Constraints:Government agencies often allocate insufficient funds for comprehensive valuation exercises, resulting in partial or outdated asset records.
- Poor Inter-Professional Collaboration:Weak synergy between accountants, auditors, and valuers leads to fragmented implementation of IPSAS requirements.
- Inconsistent Data Availability:The absence of reliable market data for public assets, especially in rural areas, poses a challenge to valuation accuracy.
- Delayed Policy Enforcement:Despite the existence of NIESV and ESVARBON regulations, enforcement of professional involvement remains weak in some government projects.
According to Iroham and Oluwunmi (2022), addressing these challenges requires sustained awareness campaigns, inter-professional cooperation, and institutional reforms that make the engagement of valuers a mandatory component of public asset management.
The Way Forward: Strengthening the Valuer’s Place in IPSAS Policy
To fully harness the benefits of IPSAS in Nigeria, there is an urgent need to institutionalize the role of Estate Surveyors and Valuers in all public sector financial reporting processes. This can be achieved through the following measures:
Mandatory Professional Involvement: Government accounting policies should explicitly require valuation reports prepared by registered valuers for all IPSAS-related asset reporting.
Capacity Building: Continuous professional training for valuers, accountants, and auditors on IPSAS standards will foster collaboration and shared understanding.
Establishment of Asset Management Units: Ministries and parastatals should set up dedicated asset management units with resident valuers.
Regular Revaluation Cycles: A statutory timeframe (e.g., every 3–5 years) for revaluation should be enforced.
Digital Asset Register Systems: Integration of valuation data into electronic asset management systems for accuracy and transparency.
By institutionalizing these measures, the government will enhance both compliance and the long-term integrity of its financial reporting systems.
Conclusion
The implementation of IPSAS has opened a new chapter in Nigeria’s public financial management, offering a pathway to transparency, accountability, and sustainable asset management. However, achieving the goals of IPSAS depends significantly on accurate and professional asset valuation—an area where the Estate Surveyor and Valuer plays an indispensable role.
Their expertise ensures that government financial statements reflect reality, not estimation. They bring professional rigor, market-based insight, and ethical responsibility to the process, guaranteeing that public resources are properly valued, efficiently managed, and strategically utilized. In essence, Estate Surveyors and Valuers are not peripheral participants in IPSAS implementation they are core partners whose services anchor the credibility of public financial statements. Recognizing and empowering their role will ensure that Nigeria’s IPSAS policy does not just comply with international standards but truly enhances accountability, fiscal discipline, and national development.
References
Ajayi, C. A. (2019). Principles and practice of valuation in Nigeria (3rd ed.). Ibadan: University Press Plc.
Aluko, B. T. (2018). Property valuation and public sector financial management. Lagos: NIESV Publications.
Ebie, S. P. (2020). Modern Property Management and Valuation Practice in Nigeria. Lagos: Spectrum Books.
Iroham, C. O., Akinjare, O. A., & Ayedun, C. A. (2020). The Role of Valuation in Public Sector Accounting: A Nigerian Perspective. Covenant Journal of Research in the Built Environment, 8(1), 20–35.
Iroham, C. O., & Oluwunmi, A. O. (2022). Integrating Professional Valuers into IPSAS Implementation in Nigeria. Journal of African Real Estate Research, 10(2), 44–59.
Nigerian Institution of Estate Surveyors and Valuers (NIESV). (2023). Professional Standards and Ethics in Valuation Practice in Nigeria. Lagos: NIESV Secretariat.
Ogunba, O. A. (2021). Valuation Accuracy and Public Asset Management in Nigeria. Journal of Property and Public Finance, 6(3), 12–25.
Oloyede, S. A., & Adegoke, J. (2020). Professional Roles of Estate Surveyors and Valuers in Public Sector Asset Valuation. African Journal of Property and Construction Management, 5(2), 41–54.
