BBC Property valuation review_1

The NAO requires specialist valuation support from RICS qualified surveyors for the audit of the Department for Digital Culture Media and Sport (DCMS) 2021-22, 2022-23 and 2023-24 group financial statements. The BBC's freehold and leasehold property assets are consolidated into the DCMS group accounts at fair value (as defined in IAS 16 and IFRS 13) under the Government's Financial Reporting Manual (FReM).

The BBC commission Lambert Smith Hampton to value its freehold and leasehold properties on a cyclical basis in accordance with the FReM. As part of our audit the NAO requires an explicit conclusion, based on reasonably sufficient and appropriate procedures over each property within the sample of assets, as to whether the valuation reached by BBC and LSH is within a reasonable range.

The NAO requires specialist valuation support (an auditor expert) to reperform an independent valuation of the sampled assets. As part of completing this engagement, the auditor expert will:

• review the valuation reports and valuation model/calculations provided by BBC and LSH;
• review the explicit/implicit (including completeness of) assumptions supporting the BBC's valuation;

• arrange and undertake physical inspections, to understand the particular properties and determine a valuation range.

The NAO will test the accuracy of significant factual inputs (for example passing rents for leasehold or leased away properties) to supporting documentation as part of reaching a conclusion on the appropriateness of the valuation of each sampled property.