Anyone who manages assets on behalf of others needs a thorough knowledge of each asset, including its value, its risk profile and its documentation. Art, however, has features of its own: there is no public register of ownership, value is closely tied to attribution and condition, and the market offers no continuous prices. In this context, periodic valuation is not a mere formality but an essential management tool.
From inventory to periodic update
The process starts with a valued inventory, in which each work is uniquely identified through a detailed description, photographs, provenance, location, condition and a value referred to a specific date. That value is then updated at intervals set out in the engagement: every few years for stable collections, more often for market sectors that change quickly. Between one review and the next, incoming and outgoing works, loans and conservation treatments are recorded, so that the inventory always reflects the collection as it actually stands.
Purpose and intended users
The purpose of the valuation must be stated each time, because it determines which value applies. Equally important is a precise definition of the intended users of the appraisal. Insurance cover uses replacement value; valuing the estate or deciding on a sale uses fair market value. Using an insurance value for accounting purposes or for a division risks misleading both those who manage the assets and the beneficiaries.
The appraiser must also clearly identify in the report the client and the intended users of the document, whether the family office board, the trustee, the beneficiaries or the insurers, while keeping the valuation engagement strictly separate from advisory work, to safeguard the impartiality of the appraiser with respect to whoever handles any sale.
Prepared on these terms, the periodic valuation becomes a fully defensible document before auditors, banks and other professionals. It takes its place in the overall picture of the estate alongside the other assets, with a clear valuation date and a clearly stated type of value.