Reconciliation Practices in Indonesia
In property valuation practice, the reconciliation process is a critical step that guides the valuer toward the final conclusion of value. The International Valuation Standards (IVS), paragraph 10.41, states that “weight is the amount of reliance placed on a particular indication of value in reaching a conclusion of value.” Similarly, the International Association of Assessing Officers (IAAO) emphasizes that reconciliation should discuss the quantity, quality, and reliability of data used in each approach, in relation to the level of confidence placed on each value indication.
But how is reconciliation actually applied in Indonesia?
A Blend of Quantitative and Qualitative Approaches
In Indonesia, reconciliation is not limited to narrative and qualitative analysis; it also incorporates a quantitative element through scoring and weighting. This method aims to promote objectivity, transparency, and reduce the dominance of personal subjectivity in arriving at the final estimate of value.
As elaborated in the article “Merekonsiliasi Indikasi Nilai dalam Penilaian”, valuers in Indonesia are encouraged to evaluate each valuation approach (cost, market, and income) by answering a set of guiding questions related to:
- Availability and quality of data,
- Relevance of the approach to the purpose of valuation,
- Market conditions surrounding the property,
- Ability of the approach to capture the property’s characteristics.
Each criterion is scored (e.g., on a scale of 1 to 5), and the total score is then used to derive the relative weight of each approach. These weights are not intended as rigid formulas but rather serve as decision-making tools to support reconciliation.
An Adaptive Practice
Nonetheless, professional judgment remains a key component. This method allows for responsible flexibility, as the valuer is still required to explain, through a narrative, why a certain approach is given more weight than others, and how the scoring outcome supports or adjusts that conclusion.
In this way, reconciliation practice in Indonesia reflects an adaptive and balanced approach, merging structured quantitative methods with qualitative professional reasoning. This is aligned with the spirit of IVS and global best practices, which advocate for greater transparency and credibility in valuation outcomes.
That concludes the article on “Reconciliation Practices in Indonesia.” We hope you find it insightful!
Penilaian.id oleh Asti Widyahari
Property Valuer & Advisor
Ni Luh Asti Widyahari, S.T., M.T., MAPPI (Cert)., is an experienced property valuer and advisor based in Jakarta, Indonesia, with extensive expertise in property valuation and property consultancy. She is the founder of Penilaian.id and CekNilai.id. Asti is also an active speaker at international conferences, promoting the property valuation profession and professional development in the sector.
Tentang Asti Widyahari
Ni Luh Asti Widyahari, S.T., M.T., MAPPI (Cert)., adalah Penilai dan Advisor Properti berpengalaman yang berbasis di Jakarta, Indonesia, dengan keahlian dalam penilaian properti dan konsultasi properti. Ia adalah pendiri Penilaian.id dan CekNilai.id. Asti juga aktif sebagai pembicara di konferensi internasional, mempromosikan profesi Penilai dan pengembangan profesional di sektor ini.
