Code of ethics in the implementation of important in the Discounted Cash Flow Model

Model Discounted Cash Flow (DCF accordance with the Code of ethics, is a must for Valuer to identify the components in the DCF analysis include the following: the projection period in which the start date and the amount of cash flow and the time period specified period. Component cash flow revenues and expenditures are grouped based on the category and the reason basic options. 

For real property assessment, in the case of property or has been completed, including the receipt of cash flow from rental income and the cost of the services that are tailored to the billing, incentives and vacancy loss, and in the case of property development with the revenue from sales, adjusted for cost of sales. To assess real property, cash flow expenditures include fixed and variable costs, reserve replacement / renewal of funds, and capital expenditure, if appropriate; for property development, direct costs (hard costs) and indirect costs (soft costs) must be identified. To assess the business, cash flow usually include all income and expenditure, both for operational and investment. Cash flow Discounted describe the money can be transferred from the business by investors, with funds still leave enough cash to fund operations and growth. 

Financing with a loan / debt (principal and interest payments) for each period and the effective interest rate per year in which interest is calculated on a regular basis, when appropriate; Net cash flows for each period (total revenues less total expenditure). The discount rate applied to the net cash flow with the stated reasons for supporting the choice. Level of capitalization (terminal capitalization rate) that is applied to calculate the value end / terminal value / exit value and the reason basic options. List all the assumptions that underlie the analysis. 
DCF analysis using all the available evidence of the market and usually reflects the thinking, perceptions and expectations of investors and other market. As a projection technique, DCF analysis should not be based on the basis that the projected DCF can be realized in specific or more but not to the level of support to the market projections DCF assessment made at the time. If DCF is used to estimate the market value, the assessment must meet all the criteria for market value estimates. 

If the Task Force to provide Valuer specific requirements that are not related to the requirements for the estimated market value as the time period, the financing, taxes, or the level of discount, estimates that the value should be considered as non-market value. The result is that estimates the value of the investment based on the specific assumptions used and not the market value estimate. 

DCF analysis may also be used to test the validity of views with the conventional analysis of the various assumptions. Results from the sensitivity analysis is the value of this investment. If DCF is used in this way, the result should be identified as non-market value and the assessment should meet all the criteria for the assessment of non-market 
Valuer should conduct adequate research to ensure that the cash flow projections and assumptions that underlie DCF model is appropriate and reasonable for the property market from the votes. For example, the analysis of each lease to support the projected cash flow from the property with many tenants must be based on the rental contract, the running and the market rent, rent a date for the evaluation and the rent, the cost of establishment clause whether or pass-throughs/recoverable , incentives to rent, rental costs, spare vacuum, capital expenditure and other special conditions that apply. Assumptions of growth and a decrease in revenue should be based on the analysis of economic and market conditions. Changes in operational costs should reflect the whole trend of expenditure and a tendency for special expenses significantly. Results of DCF analysis should be evaluated and reviewed for possible errors and reasonable

To determine the level of capitalization and discount rate, Valuer using several sources of data and information and real estate capital markets. In addition to income and sales data from the property or business benchmark, a survey on investors' opinions, and highest level is useful in selecting discount to the market with the assumption that the property market is considered consistent with the property purchased by the investors into the survey data. Valuer are responsible to ensure that input projection in accordance with the DCF had evidence the market and predicted that the market there. Next, Valuer who oversees the preparation of the DCF or the appropriate electoral model is responsible for the integrity of the model in terms of theoretical and mathematical, the amount of cash flow and fairness of the entire input. Valuer must have the appropriate experience and understanding of the market in developing cash flow and provide other input in the DCF model. 

DCF analysis on the inherent assumption that explicitly used as input in the analysis. To create a service user can create a replica of the assessment model, Valuer must disclose reasons for the use of assumptions and in the development of DCF model. In the assessment of real property, it is including but not limited to: start date, a period of time / period, and the frequency used in the model. and the projected rental income and the income level where the projected change. the projected level of expenditure and operational expenditure is projected to change. treatment at the end of the lease / closure costs, charges and spare vacuum that is losses.
Discount rate and the level of capitalization end. Valuer should be: the effective interest rate per year if the interest is periodic, where the debt (principal and interest payments) is a component of the periodic cash flows projected; determine the level of tax that is used, when appropriate; explain the reasons for the rent incentives when appropriate; the treatment of capital expenditure that occurred in the acquisition or development of property or business assets. explain the basis of determining the level of capitalization (terminal capitalization rate) and the level of discount that is applied. identify the manufacturer of the DCF model or software in use (the product name and version); describes the methods and assumptions used in the model, set the date in which the model was developed and used.