Glossary of Terms: Appraisal Reports

Glossary of Terms: Appraisal Reports

Glossary of Terms for Appraisal Reports

The following are general definitions of various valuation methodologies used in our appraisal reports. For each appraisal project, Maynards' appraisers will first meet with the client to ensure both parties agree and understand on what basis the assets will be valued. This is to ensure the end product will meet the client's needs.


Desktop Appraisal

This term implies that Maynards has not viewed the equipment and is relying on information and equipment specifications provided by sources deemed to be reliable, including the client.


Fair Market Value

A professional opinion of the estimated most probable price to be realized for property in an exchange between a willing buyer and a willing seller, with equity to both, neither being under compulsion to buy or sell, and both parties fully aware of all relevant facts, as of the effective date of the appraisal report.


Fair Market Value – In Place

A professional opinion of the estimated most probable price expressed in terms of currency for which the assets could change hands between a willing buyer and a willing seller, neither acting under any duress to buy or sell and both having reasonable knowledge of the relevant facts.   The appraisal report determines value based on current market replacement cost for similar capacity assets, plus estimated installation costs.   Alternatively, if no used market exists for the assets, value is based on an estimate of depreciated replacement cost.


Forced Liquidation Value (Auction)

A professional opinion of the estimated most probable price in terms of currency, which could typically be realized at a properly advertised and conducted public auction sale, held under forced sale conditions and under present day economic trends, as of the effective date of the appraisal report.   Conclusions take into consideration physical location, difficulty of removal, physical condition, adaptability, specialization, marketability, overall appearance and psychological appeal.

Further, the ability of the asset group to draw sufficient prospective buyers to ensure competitive offers is considered.   All assets are assumed to be sold on a piecemeal basis "as is, where is" with purchasers responsible for removal of the assets at their own risk and expense.  In the appraisal report, any deletions or additions to the assets appraised could change the psychological and/or monetary appeal necessary to gain the values indicated.   Additionally, this value is not discounted for assembling, cleaning, security, advertising, brokerage, or other disposal costs, if any.


Orderly Liquidation Value

A professional opinion outlined in the appraisal report of the estimated most probable price expressed in terms of currency, which the subject equipment could typically realize at a privately negotiated sale, properly advertised and professionally managed, by a seller obligated to sell over an extended period of time. This usually takes place within three to six months, as of the effective date of the appraisal report.   Further, the ability of the asset group to draw sufficient prospective buyers to ensure competitive offers is considered.   All assets are to be sold on a piecemeal basis "as is, where is" with purchasers responsible for removal of the assets at their own risk and expense.   Any deletions or additions to the total assets appraised in the appraisal report could change the psychological and/or monetary appeal necessary to gain the values indicated.   Additionally this value is not discounted for assembling, cleaning, security, advertising, brokerage, or other disposal costs, if any.


Replacement Value New

A professional opinion provided in the appraisal report of the cost in terms of currency in providing substitutes similar to the assets inspected that are new and exhibit modern design, technology quality, and utility.   If a direct replacement is unavailable the appraiser uses professional judgment in estimating the cost.   This cost estimate includes taxes and transportation.

 

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