APPROVED STANDARD DEFINITIONS
FOR MACHINERY AND EQUIPMENT APPRAISALS
1. REPRODUCTION COST, NEW
An opinion of the cost of reproducing a new replica of a property on the basis of current price with the same or closely similar materials.
2. REPLACEMENT COST, NEW
An opinion of the current cost of a similar new property having the nearest equivalent utility as the property being appraised.
3. REPLACEMENT COST, USED
An opinion expressed in terms of money, which the subject machinery and equipment would cost if it could be replaced by used machinery and equipment. Often, used machinery and equipment cannot be duplicated due to unavailability or model changes. Therefore, USED REPLACEMENT COST may reflect the appraiser’s opinion of Replacement with machinery and equipment similar but not necessarily identical in model, functions or capacity. USED REPLACEMENT COST is F.O.B. Used Vendor’s facility or “AS IS – WHERE IS” location of replacement machinery.
4. FAIR MARKET VALUE INSTALLED
An opinion of the estimated amount of an installed property expressed in terms of money that may be reasonably expected in exchange between a willing buyer and a willing seller with equity to both, neither under any compulsion to buy or sell and both fully aware of all relevant facts.
5. FAIR MARKET VALUE – IN EXCHANGE
An opinion of the estimated amount expressed in terms of money that may be reasonably expected for an item between a willing buyer and a willing seller with equity to both, neither under any compulsion to buy or sell and both fully aware of all relevant facts.
6. FAIR 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 fully aware of all relevant facts, as installed for intended utilization as of the effective date of this appraisal report.
7. LIQUIDATION VALUE IN-PLACE
An opinion of the estimated gross dollar amount which is projected to be obtainable from a failed facility, assuming that the entire facility would be sold intact within a limited time to complete the sale.
8. ORDERLY LIQUIDATION VALUE
An opinion of the estimated gross dollar amount which could typically be realized from a sale, given a reasonable period of time to find a purchaser(s) with the seller being compelled to sell on an “as is – where is” basis.
9. FORCED LIQUIDATION/AUCTION VALUE
An opinion of the estimated gross dollar amount which could be typically realized from a properly advertised and conducted public sale with the seller being compelled to sell with a sense of immediacy on an “as is – where is” basis.
10. SALVAGE VALUE
An opinion of the gross dollar amount that may be expected for the whole property or a component of the whole property that is retired from service for use elsewhere.
11. SCRAP VALUE
An opinion of the gross dollar amount that could be realized for a property if it were sold for its material content, not for a production use.
12. INSURANCE REPLACEMENT COST
An opinion of the replacement cost new as defined in the insurance policy, less the cost New of the items specifically excluded in the policy, if any.
13. INSURABLE VALUE DEPRECIATED
An opinion of the insurance replacement cost less accrued depreciation considered for insurance purposes.
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