Terms & Definitions

Value Definitions (ref. ASA):

Reproduction Cost New (RCN)

The cost of reproducing a new replica of a property on the basis of current prices with the same or closely similar materials, as of a specific date.

Replacement Cost New (RCN)

The current cost of a similar new property having the nearest equivalent utility to the property being appraised, as of a specific date.

Fair Market Value

is an opinion expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, as of a specific date.

Fair Market Value in Continued use with Assumed Earnings

is an opinion expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, as of a specific date and assuming that the business earnings support the value reported, without verification.

Fair Market Value in Continued use with an Earnings Analysis

Fair Market Value - Installed

is an opinion expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, considering market conditions for the asset being valued, independent of earnings generated by the business in which the property is or will be installed, as of a specific date.

Fair Market Value – Removed

is an opinion expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, considering removal of the property to another location, as of a specific date.

Liquidation Value In Place

is an opinion of the gross amount expressed in terms of money that typically could be realized from a properly advertised transaction, with the seller being compelled to sell, as of a specific date, for a failed, nonoperating facility, assuming that the entire facility is sold intact.

Value Definitions (ref. ASA): Continued

Orderly Liquidation Value

is an opinion of the gross amount expressed in terms of money that typically could be realized from a liquidation sale, given a reasonable period of time to find a purchaser (or purchasers), with the seller being compelled to sell on an as-is, where-is basis as of a specific date.

Forced Liquidation Value

is an opinion of the gross amount expressed in terms of money that typically could be realized from a properly advertised and conducted public auction, with the seller being compelled to sell with a sense of immediacy on an as-is, where-is basis as of a specific date.

Salvage Value

is an opinion of the amount expressed in terms of money that may be expected for the whole property or a component of the whole property that is retired from service for possible use elsewhere, as of a specified date.

Scrap Value

is an opinion of the amount expressed in terms of money that could be realized for the property if it were sold for its material content, not for a productive use, as of a specific date.

Insurance Cost New

is the replacement or reproduction cost new as defined in the insurance policy less the cost new of the items specifically excluded in the policy, as of a specific date.

Insurance Value Depreciated

is the insurance replacement or reproduction cost new less accrued depreciation considered for insurance purposes, as defined in the insurance policy or other agreements, as of a specific date.