Appraisal Definitions

Reproduction Cost New:* 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:* The current cost of a similar new property having the nearest equivalent utility as the property being appraised, as of a specific date.

Fair Market Value:* An opinion expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being 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:*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 earning support the value reported, without verification.

Liquidation Value – In Place:* 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, non-operating facility, assuming that the entire facility is sold intact.

Orderly Liquidation Value:* 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:* 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:* 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 specific date.

Scrap Value:* 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.

*Definitions source:  Machinery & Technical Specialties Committee of the American Society of Appraisers – July 25, 2018.