Technical Independence: Why a Value Cannot Depend on Those Who Need It

Behind every valuation there is a decision. A bank assesses whether to grant a loan, a company closes its financial statements, a family divides an estate, or an investor decides whether to move forward with a project. In every case, someone needs a number. And in every case, someone has an interest in that number being one figure and not another.

There is nothing wrong with that. A seller hopes for a high value; a buyer, a lower one. A borrower needs the collateral to be enough, and the lender needs to know it truly is. These are legitimate interests. That is precisely why the value must be determined by someone who is not part of any of them.

That is what we call technical independence.

What it is, and what it is not

Technical independence is not indifference or distrust toward the client. It is a way of working: the result comes from the analysis of the asset, not from what someone expects it to be.

Nor is it just a statement at the bottom of a report. A valuation is independent when any third party can review it and understand how the value was reached, what information was used, and why each criterion was chosen. If that reconstruction is not possible, independence is no more than a claim.

How it is built in practice

Independence does not depend on the good will of the professional. It rests on a process:

• An objective defined from the start. Valuing for loan collateral, financial statements, or the division of an estate is not the same thing. Making the purpose clear prevents the approach from being adjusted later to suit someone.
• Verified information. The data on the asset is checked against official documentation and against what is observed on site. Whatever cannot be verified is stated explicitly.
• An on-site inspection. The actual condition of a property, a farm, or a plant does not always come through in paperwork or photos.
• A justified method. Comparables, discounted cash flow, replacement cost, or others: the method is chosen based on the asset and the information available. The report explains why.
• Explained adjustments. Every difference between the asset and its market references is identified, quantified, and supported.
• Traceability. The responsible professional, the inspection date, the sources used, and the conditions of the analysis are all recorded.

When all of these steps are in place, the value stops being an opinion and becomes a conclusion that can be reviewed.

What puts it at risk

The risks are rarely obvious. They tend to show up as reasonable pressures:

• The expected number. When someone arrives with a value in mind and the analysis is steered toward confirming it.
• Urgency. Deadlines that lead to skipping the inspection or working with incomplete information.
• Partial information. Missing documentation or data that is not cross-checked.
• A stake in the transaction. When the person doing the valuation also gains something if the deal closes or if the value comes out a certain way.

A well-defined process protects against these situations. Not because it eliminates them, but because it makes any deviation visible.

Why it matters to each party

• For a financial institution, an independent valuation is the basis for measuring the risk of a piece of collateral. An inflated value benefits no one, not even the borrower, who takes on a commitment backed by security that does not exist.
• For a company, the value of its assets affects its financial statements, the entry of new partners, and its ability to obtain financing. A well-supported report holds up under review by auditors and investors.
• In estates, divisions of assets, or legal proceedings, where the parties have opposing interests, a technical value narrows the room for conflict and helps them reach agreements.
• For an investor, knowing the real value before deciding is the difference between an opportunity and a costly mistake.

In every case, an independent valuation serves the same purpose: it is a point of reference that all parties can accept, even when they do not agree with one another.

From intuition to evidence

For a long time, appraisals in Uruguay relied on personal experience: someone who knew the area would put forward a value. It worked, but subjectivity could produce significant differences from one professional to another, and that variability was a risk for those making decisions based on those numbers.

Valora was founded to change that logic: to bring in internationally recognized methodologies, adapt them to local conditions, and show what lies behind every value. As Hugo Cersósimo, CEO of Valora, puts it, the goal is “to move from intuition to evidence, with ethical rigor.”

Technical independence is what gives that change its meaning. A method applied without independence is just a more elaborate way of arriving at the number someone wanted.

In summary

A value is useful when it can stand up before those who took no part in producing it. That requires method, verifiable information, traceability, and, above all, a professional whose only commitment is to the analysis.

At Valora, we work with a multidisciplinary team of university-trained professionals under strict confidentiality rules. Because behind every important decision there should be a value that all parties can trust.