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The Methods to Estimate of Value of Tangible Fixed Assets
In estimating tangible fixed assets, we have selected houses, residential land and major durable goods etc. as the objects of estimation and have estimated their gross values and net values as of the end of November 2009.
Total net value of assets is sum of financial assets (savings minus liabilities) and estimated values of tangible fixed assets.
1. Estimation methods for houses
(1) Objects of estimation
a. Households having their own houses ? ? ? ?Owned houses for the households (the present residence and other than the present residence)
b. Households renting houses and rooms ? ? ? ?Owned houses for the households other than the present residence
(2) Estimation methods
a. Estimation method for gross value
Total floor space of dwelling (square meter) * Construction cost per square meter by prefecture and structure of dwelling
- Structures of dwelling ? ? ? ? Wooden, wooden with fire proof, ferroconcrete, block, others
- Construction cost ? ? ? ? Calculated on the basis of planned construction costs and the floor areas of houses for dwelling as shown in the Survey of Construction Work Started (2009) which compiled by Ministry of Land, Infrastructure, Transport and Tourism.
b. Estimation method for net value
Gross value (calculated by the above-mentioned method) * The rate of residual value by structures of dwelling and year of construction
p: Depreciation rate estimated by constant ratio method which stipulated in the Ministerial Order Concerning Durable Years of Depreciable Assets (Ordinance No.15, 1965, Ministry of Finance)
n: Elapsed years from the year of construction
2. Estimation methods for residential land
(1) Objects of estimation
a. Households having their own houses ? ? ? ?Owned residential land for the households (the present residence (including rented land) and other than the present residence)
b. Households renting houses and rooms ? ? ? ?Owned residential land for the households other than the present residence
Note: Residential land means the residential land recorded in the resister and owned land to construct houses
(2) Estimation methods
a. Estimation method for the present residence (residential land)
Owned land: Land area of dwelling houses (square meter) * Cost of the residential land per square meter
Rented land: Land area of dwelling houses (square meter) * Cost of the residential land per square meter by surveyed unit area * Proportion of leasehold (0.5 or 0.6)
- Cost of the residential land ? ? ? ?Estimated value per square meter of the standard places noted in "Public Notice of Land Prices" and the representative lands noted in the "Land Price Survey by Prefectural Governments" by Ministry of Land, Infrastructure, Transport and Tourism that is nearest to each surveyed unit area.
- Proportion of leasehold ? ? ? ?Where the house is an owned house and the residential land is a rented land, the proportion of leasehold is 0.5 when the structure of the dwelling is "wooden, wooden with fire proof, block or others" or 0.6 when the structure of the dwelling is "ferroconcrete".
b. Estimation method for residential land other than the present residence
Land area of dwelling houses (square meter) * Cost of the residential land per square meter by cities, wards, towns and villages
- Cost of the residential land ? ? ? ?Estimated value per square meter by cities, wards, towns and villages, calculated using the estimated values of the standard places noted in "Publication of Land Price" and the representative lands noted in the "Prefectural Land Price Survey" by Ministry of Land, Infrastructure, Transportat and Tourism. (Because the entry of the addresses was on the basis of only the names of cities, wards, towns or villages, the estimated values were the medians by cities, wards, towns or villages which were calculated by sampling the "residential districts, prospective residential districts and the present residential land within the urbanization promotion areas" from the districts and areas noted in the "Publication of Land Prices" and the "Prefectural Land Price Survey".)
3. Estimation methods for major durable goods etc.
(1) Objects of estimation:
The following durable goods etc. owned by the surveyed households
a. Durable goods ? ? ? ?In principal, the goods whose purchases price is 10,000 yen and over and durable year is 5 years and longer
b. Automobiles etc. ? ? ? ?Cars, motorcycles and scooters
c. Golf membership entitlements etc. ? ? ? ?Golf membership entitlements (market price), other sports or recreation club membership entitlements (purchasing price) and resort club membership entitlements (purchasing price) whose market price or purchasing price is 50,000 yen and over
Clothing, jewels and precious metals, paintings, and antiques whose market prices are difficult to estimate were excluded from objects of the survey.
(2) Estimation methods
a. Estimation method for gross value
Quantities by items * Unit price by items
- Unit price by items
(a) Unit prices of furniture and electric appliances were the simple average by items using the purchased quantities and expenditure of fixed items of the National Survey of Family Income and Expenditure from the data that contained in the family account books of the Family Income and Expenditure Survey in the most recent year (from April 2008 to March 2009). For the items that this method is not applicable (unit furniture, Japanese-style tables, shampoo dressers etc.), their unit prices were estimated by selling prices which is collected information from markets and retail stores.
(b) Unit prices of cars, motorcycles and scooters were the weighted average using the delivery prices of new cars over the counter in Tokyo in November 2009 and number of new car's registration by the places of production (home products or imports), trade name and displacement as the weight (but the simple average for motorcycles and scooters).
(c) Unit prices of golf membership entitlements, etc. and other durable goods were the market prices or purchase prices which recorded in the questionnaire.
b. Estimation method for net value
Quantities by items and year of acquisition * Unit price by items * The rate of residual value by item and year of acquisition
- The rate of residual value? ? ? ?The same method as that noted in "1. Estimation methods for houses" was used. In fixed items, in case of the years of acquisition are "passed 1-5 years" and "passed 5 years or more", and items not surveyed the years of acquisition, the rate of residual value of those was estimated as indicated below.
(a) In case of the years of acquisition are "passed 1-5 years", average the rates of residual value of those were calculated on the assumption that acquisition amounts of those were equal in each year during the period.
(b) In case of the years of acquisition are "passed 5 years or more", or items not surveyed, average the rate of residual value of those were calculated by estimating acquisition amounts from the results of quantity possessed in the previous surveys on the assumption that acquisition amounts of those were equal in each year during the period between the surveys.
