Allocating Value Between Real Property And The Total Asset (Going Concern)
Lamb Hanson Lamb Appraisal Associates, Inc. provides valuation services involving real property that is a part of a larger going concern. It is becoming more common that our clients are asking us to value property where the “real estate” is only one component of a greater total assets of a business or “going concern”. This is an evolving area of valuation which appraisers cannot ignore when analyzing certain property. A “going concern” includes an intangible enhancement of the value of an operating business enterprise which is produced by the assemblage of the land, building, labor, equipment, and marketing operations. In these cases, the real estate component of the total asset of the business are inter-related and inter-dependant. Some examples of properties which include real estate as part of a going concern are listed below:
Lamb Hanson Lamb Appraisal Associates, Inc. has successfully completed the Appraisal Institute course “Fundamentals of Separating Real and Personal Property from Intangible Business Assets”, which makes us compliant with new Federal Interagency Evaluation Guidelines and the new SBA (Small Business Administration) requirement to be a “qualified source’ to perform real property valuation assignments that are inter-related with a going concern.
Federally Regulated lending Institutions are required to accept appraisal reports, that must be, at a minimum, USPAP compliant. USPAP states; “In developing a real property appraisal, appraisers are required by S.R. 1-2(e) (iii) to identify “any personal property, trade fixtures, or intangible items that are not real property but are included in the appraisal.” S.R. 1-4(g) requires that when the scope of work warrants such analysis, the appraiser must analyze the effect on value of any personal property, trade fixtures, or intangible items that are not real property but are included in the appraisal. The Comment to S.R. 1-4(g) states: When the scope of work includes an appraisal of personal property, trade fixtures or intangible items, competency in personal property appraisal (see STANDARD 7) or business appraisal (see STANDARD 9) is required.
Lamb Hanson Lamb Appraisal Associates, Inc. has one of the region's most reputable professional teams of appraisal specialists with experience allocating value between real property and the total asset (going concern). The breath of our team’s experience allows us to approach any type of specialty use appraisal matter with the utmost attention to quality of service and timeliness.