(1)
Quoted price
An active-market quoted price for the same asset takes priority where one exists.
Valuation
Property values supported under Solvency II
A documented value for the relevant accounting or prudential purpose.
A method matched to the valuation purpose
A property can carry distinct accounting and prudential values. Under Solvency II, the prudential measure follows a market-value approach. The report identifies the framework, the evidence available and the assumptions supporting its conclusion.
Article 10 of Delegated Regulation (EU) 2015/35 sets an order of reference: an active-market quoted price for identical assets; where unavailable, quoted prices for similar assets with adjustments; then alternative valuation methods.
(2)
Comparable assets
Quoted prices for similar assets are adjusted to reflect relevant differences.
(3)
Alternative methods
Market, income and cost approaches use market data as far as possible.
Where an alternative method is used, the market approach draws on comparable transactions, the income approach capitalizes or discounts future cash flows, and the cost approach considers the current replacement cost adjusted for obsolescence.