Improvement Research On Evaluation Implied In Jingwan Real Estate Conduction Project

As one of pillar industries of the national economy, real estate industry iscurrently facing many difficulties such as demand reduction and cash flow shortageas well as experience a rapid development. Meanwhile, small real estate enterprisespick up their pace of integration、merger and reorganization. As a result, the demandof assessment in real estate projects, particularly construction projects, is increasing.Hypothetical development method is frequently used in construction projectassessment, which is simply formula applied by assessment practitioners. Lacking ofscientific evaluate ideas and rational evaluation parameter selection, real estateprojects’ value couldn’t be reflected effectively and accurately. So, it is how tochoose an appropriate method to assess the value of real estate that becomes a moreand more important issue.Basing on dissertation of theories of land rent and land prices, theories of landlocation and real estate price, this paper demonstrates the theoretical basi s of thehypothetical development method and the theoretical basis of using the hypotheticaldevelopment method as the evaluation method of a construction pro ject. Secondly,using Jingwan project as an evaluation case, this paper analysis the originalassessment process and evaluation results and points out that there are improprietiesduring evaluate ideas and evaluation parameter selection of original assessment.This paper revises the assessment process and evaluation results from four aspects,which include sales expense, land tax, investment profits of continued constructionand corporate income tax. Finally, to test the accuracy of revised assessment, thepaper implies discount cash flow model to assess the conduction project. Thevaluation of Jingwan project is62091107.82RMB under tradition interest-bearingaccounts model while62069556.91RMB under discount cash flow model, whichdraws out a0.0347%valuation difference that is within the allowable range. Theresult illustrates that both discount cash flow model and tradition interest-bearingaccounts model can assess real estate projects effectively when properly used.The paper improves the hypothetical development method from the practicalaspect, which is the main contribution of this paper that includes two parts. On theone hand, the paper standardizes the assessment basis of a separate accounting andseparate evaluation of high-rise buildings and villas in accordance with existing lawsand regulations. On the other hand, by applying tradition interest-bearing accountsmodel and discount cash flow model to assess the same project, the paper improve the rationality of the evaluation results and expects to reach an assessmentconclusions of the same assessment value of the same house.