Miscellaneous 2016

Why the restoration method is flawed

Source: The Tax Specialist Journal Article

Published Date: 1 Feb 2016


The market value of specialised land assets as part of a going concern business is not always readily observable because they may be rarely, if ever, traded on a standalone basis. Accordingly, a restoration method is sometimes used in assessing the market value of specialised land assets for land rich assessment purposes. This method seeks to value the specialised land assets by assessing the restoration costs of some selected non-land assets, using the restoration costs as a proxy for the value of the selected non-land assets, and subtracting the value of the selected non-land assets from the market value of total assets to arrive at a residual value which is said to be the market value of the subject land assets.

In this article, the authors argue that the restoration method is an inappropriate methodology. Its deficiencies result in the assessed market value of the subject land assets being inherently understated.

Sorry, this is subscriber only content.

To gain access to this material and much more - Subscribe Now.

(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).

Already a Subscriber? Login now

Already a Subscriber? Login now


The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.

Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))


The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

Copyright Statement

All materials provided on this site are protected by copyright and are owned by or licensed to TTI.

Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.


Miscellaneous 2016

Share this page