Appraisal Definitions

                                                                                  

FAIR VALUE (“FV”)

(Accounting Standards for Private Enterprises – “ASPE” or “IFRS”), as defined by the Financial Accounting Standards Board, is the price that a financial asset would be measured at a cost or at a amortized cost based on a “Normal Useful Life” of that asset

FAIR MARKET VALUE (“FMV”)

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 to sell and both having reasonable knowledge of relevant facts, as of a specific date.

FAIR MARKET VALUE - INSTALLED (“FMV-I”)

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 being under any compulsion to buy or to sell, and both fully aware of all relevant facts, including installation, 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.  This amount includes all normal direct and indirect costs, such as installation and other assemblage costs to make the property fully operational.
 

FAIR MARKET VALUE - REMOVED (“FMV-R”)

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, considering removal of the property to another location, as of a specific date.
 

ORDERLY LIQUIDATION VALUE (OLV)  

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 a certain period of time, based on the current market conditions, as of the effective date of this 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”, “where is” with purchasers responsible for removal of the assets at their own risk and expense.  Additionally this value is not discounted for assembling, cleaning, security, advertising, brokerage, or other disposal costs, if any.

NET ORDERLY LIQUIDATION VALUE (“NOLV”)

Orderly Liquidation Value as defined above net of the costs of liquidation. These costs may include all liquidation costs including sales commission, marketing, advertising, sale site preparation, moving, repair, travel, labor expenses, occupancy including utilities and insurance costs.

FORCED ORDERLY LIQUIDATION/AUCTION VALUE (FOLV)  

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 this appraisal report.  Conclusions take into consideration 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”, “where is” with purchasers responsible for removal of the 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 values indicated.  Additionally this value is not discounted for assembling, cleaning, security, advertising, brokerage, or other disposal costs, if any.

NET FORCED ORDERLY LIQUIDATION VALUE (“NFOLV”)

Forced Orderly Liquidation Value as defined above net of the costs of auction or a liquidation sale. These costs may include all costs including commission, marketing, advertising, sale site preparation, moving, repair, travel, labor expenses, occupancy including utilities and insurance costs.

REPLACEMENT COST NEW (“RCN”)

The current cost, of a similar new Asset having the nearest equivalent utility as the Asset being appraise as of a specific date.

REPRODUCTION COST NEW (“RCN”)

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

PHYSICAL DETERIORATION

A form of depreciation where the loss in value or usefulness of a property is due to the using up or expiration of its useful life caused by wear and tear, deterioration, exposure to various elements, physical stresses, and similar factors.

FUNCTIONAL OBSOLESCENCE

A form of depreciation in which the loss in value or usefulness of an Asset is caused by inefficiencies or inadequacies of the Asset itself, when compared to a more efficient or less costly replacement property that new technology has developed.  Symptoms suggesting the presence of functional obsolescence are excess operating cost, excess construction (excess capital cost), over-capacity, inadequacy, lack of utility, or similar conditions.

ECONOMIC OBSOLESCENCE

A form of depreciation or loss in value or usefulness of an Asset caused by factors external to the Asset.  These may include such things as the economics of the industry; availability of financing; loss of material and/or labour sources; passage of new legislation; changes in ordinances; increased cost of raw materials; labour or utilities (without an offsetting increase in product price); reduced demand for the product; increased competition; inflation or high interest rates; or similar factors.

ACTUAL AGE/CHRONOLOGICAL AGE

The number of years that have elapsed since the item or property was originally built or placed in service for the first time.

EFFECTIVE AGE

The apparent age of a property in comparison with a new property of like kind; that is, the age indicated by the actual condition of the property.  The Effective Age varies with the amount of use, regularity and extent of maintenance, wear and tear, etc.  For this reason, the Effective Age for a given asset may be more than, less than, or equal to the Actual Age.

REMAINING USEFUL LIFE (RUL)

The estimated period during which a property of a certain effective age is expected to actually be used before it is retired from service.

DEPRECIATION

The actual loss in value or worth of a property from all causes including those resulting from physical deterioration, functional obsolescence, and economic obsolescence.