For years, de Jong & Laan has controlled an important part of Waarborg Vastgoed's portfolio. Edwin Slot, partner and external accountant of de Jong & Laan: “We were already fairly far along with the audit, the final discussion was in sight, when an external reviewer judged during the assignment-oriented quality assessment that the file was too thin for the valuation of the properties . Then you have to start again. And back to the customer. That puts a lot of strain on the relationship.”
Waarborg Vastgoed is a facilities company focused on corporate housing and living. Waarborg invests in the higher real estate segment and facilitates 300 companies. Waarborg works on the value of real estate on a daily basis and had already written down a lot of properties during the crisis based on its own valuation model. Yet the outcome of the assignment-oriented quality assessment was inexorable: the value of the properties had to be based more on appraisals from independent third parties.
Slot: “I immediately went to our compliance officer and we delved into the matter again. Valuation of properties remains an estimate. And the crisis has not helped. Many valuations were still based on bankruptcies, while Waarborg actually added value. Waarborg's internal valuation model is also based on this. Fortunately, as accountants we have a guideline that indicates how to deal with estimates. We ultimately used this to determine the bandwidth again.”
René Agema, director of Waarborg Vastgoed, understands the commotion. “Since the crisis, no one knows the exact value of real estate anymore. The classic model of valuation no longer works, which appraisers find difficult. We see that the value is strongly influenced by sustainability, by the management of a building and by multi-tenant, in other words how flexible a building is. That is why we use our own valuation system.”
Slot used these insights to go back and forth between the customer, the appraisers and the external reviewer several times. Ultimately, the same principles were used in Waarborg's model and the external appraisals and an acceptable bandwidth was achieved. This is included in Waarborg's annual accounts and mentioned in the statement. Slot: “I found it difficult for Waarborg that we discovered this so late in the process, but it has increased the quality of the annual accounts and audit.”
Agema: “We have our business running at full throttle. At first, a difference of opinion and the associated delay were a concern. Not anymore. In fact, I now look more lightly at reports. The old Excel overviews for valuation have not worked for a long time. Especially now that the market is picking up again. If all parties take more responsibility from now on, a healthier balance will automatically emerge. Until then, we mainly form our own opinion.”
