Cost valuation

reconciliation

When
Usually commences after the
external valuation
Time dependent upon the complexity
and size of project
Usually takes two weeks to complete
Discussed at Monthly CVR meeting

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

Fundamental principle
Prudence
Match expenditure with income
Uses the application for payment and
the architects certificate to
substantiate the valuation/Net sales
value of the works

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

Documentation used
External valuation
Identification of:

Overmeasure
Undermeasure
Variations in dispute
Claims in dispute
Materials on site
Undercertification

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons,
Ltd.

Information flows

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

Documentation (contd.)

Overmeasure schedule
Undermeasure schedule
Subcontractor liability build-up
Architects/Engineers certificates
Contra charge invoices

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

Definitions
Overmeasure
Claimed-Unpaid
Claimed-Paid

Definition-Application for monies in advance of their

eligibility
Undermeasure
Definition-Work completed that costs have been
incurred for but havent been included in the
application for payment
Measured works
Variations

Work in Progress
Definition-Work that has been carried out in the
period between the cost cut-off date and the valuation
date
2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

Basic principle
Net sales value uses the application
for payment as the baseline
Application adjusted as follows:
Overmeasure Deducted
Undermeasure - Added
Materials on site - Deleted

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

Basic principle
Net sales value uses the application
for payment as the baseline
Application adjusted as follows:
Overmeasure Deducted
Undermeasure - Added
Materials on site - Deleted

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

Documentation supporting the

CVR
Internal valuation broken down into a set of

allowances
Overmeasure schedule
Undermeasure schedule
Cost statement
Subcontractor liabilities
Buying reconciliation
Materials reconciliation
Cost to complete exercise
Estimated final account/profit margin
Architects/Engineers certificate
Narrative explaining variances

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

10

Cost statement

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

11

Adjustments for work in

progress

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

12

When to report a loss?

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

13

Internal and external bills

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

14

Adjustments

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
15

Simplified CVR pro forma

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

16

A more complex example

17

Discussions at CVR meeting

Profit release
Cash flow
Turnover
Items in dispute
Variations
Claims

Items for management action

2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley &
Sons, Ltd.

18