A consolidated approach to the valuation of receivables secured by collateral

Abstract

Aim. The presented study aims to propose a consolidated approach to determining the market value of receivables secured by collateral and to develop an algorithm for its practical application.
Tasks. The author analyzes and systematizes existing methods for the valuation of receivables; formulates prerequisites and trends that necessitate the use of a modified approach.
Methods. This study analyzes scientific works and the author's practical experience to identify the advantages and disadvantages of methods for the valuation of receivables. The author's consolidated approach to determining the market value of receivables secured by collateral is based on the application of general scientific methods of cognition: analysis, synthesis, generalization, and visualization.
Results. During the study, characteristic trends of the receivables market and factors causing the need for a qualitative and comprehensive analysis of the potential debtor are identified. A systems analysis of the methods and techniques of the income approach to determining market value is performed, taking into account the advantages and disadvantages, due to the possibility of its application in modern conditions. The study proposes a consolidated approach to determining the market value of receivables in the context of a significant amount of debt. The essence of the approach is to determine the value of receivables, making allowance for the availability of mortgaged property that can be sold and thereby cover part of the debt. The remainder of the debt is recovered through repeated appeals to the court or by selling other company assets. An algorithm for the implementation of the approach is proposed, specifying the conditions for its application and the sequence of valuation.
Conclusions. The uniqueness of each receivable makes it necessary to apply a modified approach to determining its market value. Using the proposed approach in practice will produce the most reliable valuation result, which, in turn, will allow potential.