What is Fair Market Value and How Can It Help My Business?
By definition, Fair market value (FMV) is an estimate of the market value of a property, based on what a willing, unpressured buyer would likely pay to a willing, unpressured seller in the market. Determining FMV will most often involve consideration of age, condition, original cost, market evidence of buy/sell transactions for same/similar property and in some cases, the status of technology (i.e. medical and computer equipment). There are several variations to a simple buy/sell transaction caused by respective circumstances that will impact the value assigned. Several examples of common instances would be:
- FMV/Continued Use – (property is to remain in its current operating environment)
- FMV/Orderly Liquidation – (seller has the opportunity to seek out buyers)
- FMV/Forced Liquation – (i.e. auction)
Why Do I Need A Valuation?
A seller or buyer may elect to engage an expert appraiser to conduct a valuation in order to establish an objective, third-party perspective. If so, two options exist:
- Desktop Valuation – seller provides to the appraiser a listing of property to be valued with item description, manufacturer, model, age, operating condition and approximate original cost. Pictures of any property assumed to have significant value should be included.
- Site-Visit Valuation – appraiser completes a visual inspection of the property to be valued via an inventory
The desktop version offers the seller a lower cost alternative to the site-visit version, as the time and cost of a visit are avoided. The desktop version works well when there are limited items to be valued and/or the property is considered to be of relatively low value (i.e. furniture, low-end business equipment). In comparison, a site-visit valuation may be optimal if the subject property is assumed to be of considerable value or if there is a high probability the valuation will be entered as evidence in litigation.
Come Get To Know Us!
To learn more about Partners healthcare Group and the many services we offer, please visit us online at www.PHGWorks.com, call us at (615) 370-5014, or toll-free at 1-800-270-7582 . You can also visit us on Facebook, Twitter, Google or LinkedIn! We look forward to working with you in the future!
Posted on 03/02/2018 3:22 PM by Partners Healthcare Group