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4.2. Valuation of Business Cost of the company is an objective parameter of its activity result. The valuation of business includes the profound financial, organizational and technological analysis of the current activity and prospects of the estimated enterprise. Definition of business valuation is extremely important for efficiency estimation while making management decisions when the criterion for the choice is the increase of the company’s cost. While attracting investments and credit resources there is a necessity in carrying out the valuation procedure as the balance cost of assets usually differs significantly from the market cost. Performance of the valuation procedure for a business presupposes various kinds of restructuring of the enterprise (see Section 2.5. of the Guide “Restructuring and Reorganization of Business”). Evaluative activity (valuation)103 is an activity which basic purpose is the definition of the market cost or some other cost of the object under valuation as of the certain date (date of the valuation) according to purpose of the valuation. The systematization and the analysis of the information collected with regards to the object of valuation, are made on the basis of provisions of special valuation principles. The principles are based on logic, rules, and models of economic behavior of subjects, entering the market relations, that influence the formation of cost of goods at the free market. The market cost of the object under valuation on three approaches is the most probable price of the object under valuation it can be alienated in the open market in conditions of com-petition when the parties of the transaction operate reasonably, having all necessary information, and no force majeure reflect on the amount of the transaction cost, i. e. in case when: + One of the parties of the transaction is not obliged to alienate object under valuation, and other part is not obliged to accept the performance of it; + The parties of the transaction are well informed on the subject of the transaction and operate in their own interests; + The object under valuation is presented in the open market in the form of the public offer; + The cost of the transaction is a reasonable remuneration for the object under valuation and there was no compulsion to perform the transaction with regards to parties of the transaction made by anyone; + Payment for the object under valuation is expressed in the monetary form. The definition of cost of objects under valuation is based on three approaches: 1) Profitable approach, that calculates the amount of future income of the object under valuation; 2) Spending approach, that calculates investments necessary for such object formation; 3) Comparative approach, that analyzes costs of sales for objects similar to the evaluative one. Each approach includes various methods. The choice of certain approaches and methods of estimation is determined basing on the type the object under valuation, a type of cost, valuation purposes and other factors. The valuation can be carried out in two cases: 1. In the cases directly stipulated by legislative deeds of the Russian Federation (obligatory valuation); 2. By the client's initiative (initiative valuation). 103

Controlled by Federal law “On valuation activities in Russia” № 135-ФЗ of 29.07.1998 (amended) and by other legal acts of Russia approved in connection with it and by international agreements of Russia. 149  

1. STATE AND MUNICIPAL AUTHORITIES IN ST. PETERSBURG In St. Petersburg the system of state authorities was formed which has statutory object...