Valuation Methods

Our experts use the full range of established valuation methods.

Reference Value Method

Also known as Comparative Value Method, the Reference Value Method uses transaction data of comparable vessels in order to determine the value. Transaction data include reported sales and newbuilding prices from our comprehensive database. Adjustments are made according to the specifications of the individual vessel. 

Discounted Cash Flow (DCF)

A method of valuation in which projected future cash flows (typically time charter income) are discounted back to a present value using the time value of money.

Long Term Asset Value (LTAV)

The Long Term Asset Value (LTAV) is a specific case of earnings-based analysis developed by the Hamburg Shipbrokers’ Association (VHSS). Weselmann has been part of the LTAV working group since its inception and has materially contributed to the development of the method. 

The LTAV uses standardized parameters and a uniform discount rate. 

Material Asset Valuation

Material asset value analysis is mainly used in cases where neither the comparative asset value method nor an earnings-based approach are practicable.

In practice this usually happens with highly specialised ship types which rarely or never appear in the sale and purchase market and for which no observable charter market exists such as pilot boats for example.

In the material asset analysis approach, the asset is mentally broken down into its component parts such as hull, main engine, navigation equipment et cetera. An appropriate value is assigned to each component and these are added to derive the material asset value.

The lower limit for the material asset value is the vessel’s scrap value, whereas the upper limit is the replacement cost.

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Bernd Holst