Purpose & Function

All jewellery valuations can be separated into appropriate usage by definition of the purpose, that is, the reason for which the valuation will be used, and the function, that represents the commercial level of the market in which the valuation will operate.

The purposes of a valuation include, but are not exclusive to

The functions of a valuation include, but are not exclusive to

  • retail replacement
  • auction reserve
  • second hand replacement
  • non-forced sale and
  • forced sale which may be representative of different dollar values 

 

Coloured Gemstones

 Commonly Used Valuation Functions

1. Retail Replacement:

An appraisal for “Retail Replacement Value” is usually given as the average estimated replacement value for an item of jewellery purchased at a Retail level in the marketplace. This value will very according to the “market conditions” of when and where the item is purchased.

 

2. Auction Reserve:

An appraisal for “Auction Reserve Value” is usually given to reflect the fall of the hammer price of an item without buyer or seller premiums. This value may vary according to market conditions in different geographical regions as well as the differing types of clientele which may attend a specific type of auction.

 

3. Second Hand:

An appraisal for “Second Hand Replacement Value” is usually given for jewellery items that have been used and must take into account the “present condition” of the item which will include evidence of wear and tear, previous repair and or abuse. This type of appraisal will also reflect the desirability and collectability of the item in the current market conditions and will vary with differing purposes.

 

4. Non-forced Sale:

An appraisal for “Non-forced sale value” is usually given as an estimate of a jewellery items reasonable and realisable second hand value which may be obtained where there are no time constraints involved for the items resale in the market place. This type of appraisal is usually used for the “purpose” of private sale or Estate division.

 

5. Forced Sale:

An appraisal for “Forced sale” or “Immediate sale” is usually given as an estimate of the value of a jewellery item where immediate disposal is required with no time to “trade, bargain or shop for the best price available”.

 Coloured Gemstones

Commonly Used Valuation Purposes

1. Insurance Replacement:

The purpose of an Insurance replacement appraisal is to provide both the client and an Insurance company with details of all correct technical and descriptive information to allow both parties to reach agreement on the basis for an insurance cover. These appraisals are the most common reasons for the issuance of a jewellery appraisal.

 

2. Divorce Settlement:

The purpose of an appraisal for Divorce settlement is to provide the client with suitable technical detail and value to allow for a suitable distribution of items by all parties involved. These appraisals may reflect specific instructions from the legal community and will sometimes include a range of the valuation functions given above for purposes of comparison.

 

3. Private Sale:

The purpose of an appraisal for Private sale is to provide the client with an estimate of value where the jewellery item is to be traded between two private parties in a market other than a normal “retail” situation and will not normally reflect retail market overheads.

 

4. Probate:

The purpose of an appraisal for Probate was used in the past to provide information for the determination of probate payable as taxation and charges on a deceased estate for government taxation. It represents the lowest value applicable usually by “Forced Sale”. However it is now more usual for this purpose to use a valuation for Estate Division as presently Probate does not apply.

 

5. Estate Division:

The purpose of an appraisal for Estate division is to provide the client with suitable technical detail and value to allow for a suitable distribution of items by all parties involved. These appraisals may reflect secific instructions from the legal community and will sometimes include a range of the valuation functions given above for purposes of comparison.