MRG Newsletter September 2017

FMV Appraisals/Definitions

 

Hospitals and healthcare facilities require appraisals on a daily basis to determine FMV (Fair Market Value) on capital assets.

Uniform Standards of Professional Appraisal Practice (USPAP) is considered the quality control standards applicable for real property, personal property, intangible assets, and business valuation appraisal analysis and reports in the United States.

We thought it would be beneficial to share with clients the different types of appraisals and definitions that are used when applying FMV to capital assets:

Fair Market Value – Installed
FMV-I is the estimated amount, expressed in terms of money, that may reasonably be expected for an installed property in an 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, including installation, as of a specific date. (This amount includes all normal direct and indirect costs, such as installation and other assemblage costs, to make the property fully operational but does not have to be supported by the business earnings.)

Fair Market Value – Removal
FMV-R is the estimated amount, expressed in terms of money, that may reasonably be expected for a property, 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, as of a specific date, considering the cost of removal of the property to another location.

Fair Market Value in Continued Use
FMV-CU is the estimated amount, expressed in terms of money, that may reasonably be expected for a property in an 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, including installation, as of a specific date, and assuming that the earnings support the value reported. (This amount includes all normal direct and indirect costs to make the property fully operational and may not readily pertain to aircraft.)

Fair Market Value
FMV is the estimated amount, expressed in terms of money that may be reasonably expected for a property in an 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, as of a specific date.

Forced Liquidation Value
FLV is the estimated gross amount expressed in terms of money that could be typically 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.

Orderly Liquidation Value
OLV is the estimated gross amount expressed in terms of money, that could be typically realized from a liquidation 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 as of a specific date.

Salvage Value
Salvage Value is the estimated 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 use elsewhere, as of a specific date.

Scrap Value
Scrap Value is the estimated 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.

MRG Projects:
I&A services for M&A in OH and KY

MRG Appraisal of the Month:
1qty GE V-Scan handheld ultrasound
-FMV: $4000.00

 

 

 

MRG Fun Facts:
Jimmy Carter was the first president to be born in a hospital.