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Glossary & Definition of Values
 

Fair Market Value - Removal
A professional opinion of the estimated most probable price expressed in terms of currency to be realized for property in an exchange between a willing buyer and a willing seller, with equity to both, neither being under any compulsion to buy or sell, and both parties aware of all relevant facts as of the effective date of the appraisal report. This assumes the buyer will remove the property.
 
Market Value - In Place
A professional opinion of the estimated most probable price expressed in terms of currency to be realized for property in an exchange between a willing buyer and a willing seller, with equity to both, neither being under any compulsion to buy or sell, and both parties aware of all relevant facts, as installed for intended utilization, as of the effective date of the appraisal report.
 
Forced Liquidation Value
A professional opinion of the estimated most probable price expressed 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 taken into consideration are 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 insure competitive offers is considered. All assets are to be sold on a piecemeal basis 'as is' with the purchasers responsible for the removal of assets at their own risk and expense. Any deletions or additions to the assets appraised could change the psychological and/or monetary appeal necessary to gain the price indicated.
 
Orderly Liquidation Value (Auction Value)
A professional opinion 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, usually within six to twelve months, as of the effective date of the appraisal report. Further, the ability of the asset group to draw sufficient prospective buyers to insure competitive offers is considered. All assets are to be sold on a piecemeal basis 'as is' with the purchasers responsible for the removal of assets at their own risk and expense. Any deletions or additions to the assets appraised could change the psychological and/or monetary appeal necessary to gain the value indicated.
 
Insurable Cash Value
A professional opinion estimated in terms of money that would be required to duplicate, as nearly as possible, the equipment described in the appraisal report. This value includes machine cost, freight, rigging, installation, electrical and pneumatic connections, foundation costs and leveling of the equipment. In cases where individual machines cannot be replaced model for model, a machine of equal capacity and similar age would be substituted. This value makes no provisions for travel costs, loss of business costs, and applicable taxes.
 
Residual Value
The projected value expected by a lessor at the termination of a "fair market value" lease. This value usually falls somewhere between the fair market value and its orderly liquidation value and is based upon the lessor's calculated expectations of the willingness of the lessee to buy the equipment at its fair market value. In the event the lessee elects to return the equipment, the lessor is likely to dispose of the equipment at its orderly liquidation value.

 
Desktop Opinion
A professional opinion of the appropriately defined value, expressed in terms of currency to be realized by the sale of assets, in which the opinion is generated from lists and/or other informational materials supplied to the appraiser and evaluated without the benefit of an actual on site inspection. This opinion is not recommended for use in credit decisions. A desktop opinion should be used to determine the need for an appraisal or the scope of an appraisal.

 

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