Profits Method

Methodology

The profits method (also known as the trading-accounts approach) values properties whose value is inseparable from a specialised trading business operated from them. The valuer derives a fair maintainable trade (FMT) from historic and projected trading accounts, deducts a notional operator’s wage, then capitalises the residual at a market-derived years’ purchase or yield.

The Insitive module ingests trading accounts from your in-house API or CSV upload, normalises them to a fair-maintainable basis, and benchmarks each line against industry datasets (where licensed). The output is a going-concern value that can be apportioned between land, buildings, plant, and goodwill for stamp duty and tax purposes.

When to use it

• Hotels, motels and serviced accommodation.
• Licensed venues (pubs, clubs) and gaming.
• Service stations, car parks and child care centres.
• Cinemas, theatres and entertainment venues.

Standards & references

• IVS 200 — Businesses and Business Interests (trade-related property), IVS 2025.
• IVS 105 — Valuation Approaches and Methods (Income Approach / profits basis).
• API Professional Practice 2021 — Australian Property Institute (adopts IVS).
• ATO TR 2002/16 — apportionment between land, buildings, plant and goodwill.

Plugin interface

Every method is a self-contained module that plugs into the Valuation App. It exposes a typed input/output schema so it can be invoked from a report writer, a workflow, or your own backend.