LTAV Association for Promotion of Long Term Asset Value MethodHamburg Ship Evaluation Standard
The Long Term Asset Value (LTAV) has been available to the maritime industry since 2009. It is a newly developed ship evaluation method based on a Discounted Cash Flow model (DCF), supplementing the previously existing evaluation methods.
It is an evaluation method which is independent of market disturbances, and is oriented towards the long-term, sustainable earnings potential of a ship. It is based on the Discounted Cash Flow method, which has been adapted to the requirements of ship evaluation. The method was developed on the basis of conservative, sustainable and statistically proven, transparent principles, in order to take due account of the volatility of the shipping markets.
The Association would welcome new members, especially in order to ensure that specifically the discount factor determined independently by PwC is applied in accordance with the Hamburg Ship Evaluation Standards (HSES) in calculation of the LTAV. Among other things, this ensures comparability of the different evaluations.
Fur further information on LTAV, please visit the website http://www.long-term-asset-value.de.
It is an evaluation method which is independent of market disturbances, and is oriented towards the long-term, sustainable earnings potential of a ship. It is based on the Discounted Cash Flow method, which has been adapted to the requirements of ship evaluation. The method was developed on the basis of conservative, sustainable and statistically proven, transparent principles, in order to take due account of the volatility of the shipping markets.
The LTAV cannot and should not replace the usual evaluation procedures with which the market value of a ship is determined in functioning markets in accordance with the rules of the banks that give ship loans and the legal stipulations. But the LTAV can be used in functioning markets, and in particular in disturbed markets, to determine a conservative, objective, long-term, sustainable earning value for a ship. In the case of disturbed markets, it can be used as a regulative both where the market undervalues and where it overvalues.
The acceptance of this method has increased as a consequence of the financial and economic crisis, also as a further indicator for the value retention of the ship in question. A supporting factor here is that similar earnings value methods are also used in other asset classes, e.g. in the aviation industry and the real estate sector. The method complies with standard IDW S1 issued by the Institut der Wirtschaftsprüfer (Institute of Auditors), and is correspondingly used by a large number of auditors.
After the LTAV model met with a large degree of acceptance in the national and international maritime industry in the last two years, various representatives of the maritime industry set up a separate Association with the purpose of further developing and disseminating this ship evaluation model.
The Association members also receive the quarterly updates of the discount factor to be applied in the LTAV, and are regularly informed of other innovations.
The Association would welcome new members, especially in order to ensure that specifically the discount factor determined independently by PwC is applied in accordance with the Hamburg Ship Evaluation Standards (HSES) in calculation of the LTAV. Among other things, this ensures comparability of the different evaluations.
The Association is located at the offices of the Hamburg Ship Brokers Association (Schopenstehl 15, 2009 Hamburg).
Fur further information on LTAV, please visit the website http://www.long-term-asset-value.de.
If you have any questions, please contact the Association Chairman, Mr. Bernd Holst, on phone 040/688 746 60 or VHSS Managing Director Dr. Alexander Geisler, on phone 040/32 60 82.