In any professional practice one often deals with real and probable assets, advantages and rights. These accrue to a client as a result of not only a professionals’ actions, but often intentions and presence.
Professionals and Clients on their own and together try to assess the cost and value of things they deal with. Professionals have to operate within certain limits. These limits are monetary requirements and non-monetary obligations such as the laws, social confirmation and professional ethics.
Monetary requirements are largely defined by the costing of the action or involvement. The professional, however, would go beyond the costing process and justify the professionalism by Valuation. In functional sense the value shows how much professionalism has helped a client gain something beyond the nominal cost of acquisition. Whereas, a Client wants to know, if the intervention of a professional, translates into an advantage.
Valuations determine, what one would gain by acquiring, or disposing something. Value reflects an addition or deduction to wealth. Cost at the moment of transfer of ownership or usage rights may or may not reflect the Value of an item, but it helps in a better judgement of the Value.
Cost, Value and Design Practice: In design field valuation is made for all types of properties to assess their wealth. Whereas, the Costing is done to determine the expenditure (actual or probable) and thus the immediate Value of an object. Often people (connoisseurs) need to know, if an entity means wealth in the Cost or Value Terms, and in what proportion, and, so may carry out both. Routine jobs have a predictable Cost. However, jobs with substantial intellectual effort accomplish more than the cost of implementation. So, a dilemma occurs, should one charge a Professional Fee on the total Cost of the job, or Value accruing out of the job? Authors of creative efforts must know how to Value their accomplishments, and thereby demand fair compensation or ‘Commission’ for it. Designers need to know both the Cost and Value of their professional services.
There are two types of Valuations. Valuation of monetary nature, and Valuations of Non-monetary nature. Both together provide to true assessment of a possession.
Valuation of Monetary nature
Monetary valuations are not very different from Costing exercises. Though here utility, desirability, scarcity, availability and marketability etc. of an item are assessed in Monetary Terms, rather than Market equivalent Costs of such items. Value Assessments are very subjective, and so may not seem rational. It is the experience of the Valuer that imparts some degree of objectivity and also reliability to the valuation.
Valuations of Non-monetary nature
Valuations of non-monetary nature, are made to check the adherence to values, customs, traditions, ethos, rules, regulations, laws, etc. Greater adherence to these issues results into higher Value application to the product. Non monetary Valuations have a relevance only to people who are concerned with it in some way. Often negative or repulsive aspect of an entity, such as Hitler’s memorabilia, blacks magic tools, due to their rarity, invites a connoisseur’s favour. Non monetary Valuation based on one aspect or few concerns are not very useful, desirable, or even reliable. Non monetary Valuations based on too many factors are not comparable, so must be scaled into some economic or monetary component. These, makes Valuation, a very complicated process.
Quantity estimates deal with actual measures and real life conditions but, in some situations do not serve much purposes. Quantity estimates to be meaningful are correlated with other values. With quantity estimates remaining constant, the co-related values are considered as the variables. The most common is the ever changing monetary value. Many such Values are measurable and realistic that, compared to other difficult to measure and abstract values like the ecological or social relevancies.