Evaluation of jewels and gems allows getting the most accurate and detailed information on jewelry. It is a special type of evaluation activity and is carried out by evaluators with expertise in mineralogy of gemstones, in basics of gemstone processing, and in technology of making jewelry.
In modern economic conditions, the interest in gemstones and products made of them has sharply increased. The jewelry market has experienced a period of its formation and now, is at the stage of rapid growth. The opening jewelry stores, workshops, pawnshops, buy-ins, banks engaged in trading and mortgage operations with jewels, created a demand for expert evaluators of jewelry and gemstones. The importance and necessity of valuation activity is reinforced by the expansion of the sphere of jewelry circulation. Along with the traditional jewelry production, wholesale, retail and commission trade, the pawnshops and buy-ins are rapidly developing. The interest in jewelry antiques expands.
Jewelry and gemstones evaluation - the activity of a professional evaluator aimed at assessing the qualities and estimating the value of gemstones or jewelry made of precious metals and precious stones. In comparison with other types of goods, jewelry is unusual - it is luxury goods. They tend to be acquired when the standard of living is high enough and the economic situation is favorable. In the case of deterioration of these indicators, firstly, demand falls for jewelry. In addition, jewelry made of precious metals and precious stones with its diminutiveness is characterized by a high "concentration" of price. Their high cost is predetermined by rarity and uniqueness, but this is not enough; a high level of customer confidence in the product and in the reliability of information on it are necessary. Although jewelry is not usually purchased for resale purposes, nevertheless, the purchase motivation is reinforced by the conviction that they will not be discounted in the future. The trust factor predetermines the high responsibility of evaluators for their professional activities.
Evaluation of jewelry and gems is necessary for:
- resolving property disputes;
- insurance purposes;
- security lending;
- purchase or sale;
Evaluation methods for diamonds, jewelry stones and products:
Evaluation of gemstones involves the determination of their market value in accordance with the rules, norms, standards and methods adopted in the international practice of the jewelry business, which are the basis for evaluating diamonds, jewelry stones and products. The choice of evaluation method and type of value depend on the purpose of evaluation. Under market conditions, the most common type of value is market value. Market value is objective, independent of the desire of individual market participants and reflects the real economic conditions prevailing in this market. Types of jewelry value are predetermined by the operations wherein they are used (purchase and sale, security lending, buy-in, insurance, resolving property disputes, etc.) that leads to a variety of types of prices.
- evaluation of jewelry and gemstones from a cost perspective (cost method)
- evaluation of jewelry and gemstones by direct comparison of sales (sales comparison approach)
- evaluation of jewelry and gemstones tones in terms of expected income (discounted cash flow method)
The following documents are necessary for evaluation of jewelry item or batch of jewelry items:
- Documents of title in relation to the Item being evaluated, if available.
- Certificate of the balance value for the Item being evaluated in respect of the items belonging to the legal entity.
- Expert technological report that determines quantitative and qualitative characteristics of the Item being evaluated. The report must necessarily contain:
- The name of the jewelry.
- The photo of the jewelry.
- The weight of the jewelry.
- An indication of the alloy in the product and photo of the stamps present on the jewelry.
- Information on the composition of the jewelry alloy from which the jewelry is made.
- Description of jewelry stones present in the jewelry, indicating their weight, quantitative and qualitative characteristics. Reference is possible to the previously issued Expert gemological conclusion with a copy attached.
- Information on the technique of making jewelry and its design.
- Information on the type of setting jewelry stones in the product.
- Information on the types of decorative trim of the jewelry.
- Technological report may contain other information that is important according to the expert.
- If the Item being evaluated belongs to legal entity, in order to establish the characteristics of the Item it is sufficient to obtain a specification for the Item being evaluated with a detailed description signed by the responsible persons of the legal entity.
If the Item of evaluation is an antique piece of jewelry or has artistic value, it is necessary to obtain an art report. In some cases, the art report is combined with the technological report.