Appraisal

“ The inspection in the field, in addition to the placing of a percentage for depreciation, should involve a complete check of the inventory, a correction of all errors, due to the construction of new property or the destruction or removal of old, and a compilation of all information required for a complete, correct, and intelligent appraisal of the physical property by the computing office. Every appraisal is different, and every property offers new problems and diverse conditions. ”

“ The individual engineer, or commission of engineers, entering upon an appraisal of large magnitude, particularly one including properties of more than one company, will find conditions varying in every one, and each property presenting new, complex, and confusing elements of value to pass upon and determine. ”

“ Long-lived assets obviously need not be tested so frequently as short-lived assets; and [Pg 195] the periods should be shortened when the asset has been serving under supernormal conditions; the intensity of its life would be a controlling factor. It is usually stated that this testing of rates and conditions should be made at least every five years in the form of an appraisal. In the physical appraisal care should be used not to allow present market prices to enter into it, else the element of fluctuation may easily be brought in to nullify or exaggerate the real results of depreciation. ”

“ Unless within fifteen days after a statement of such loss has been rendered to the company, either party, the assured or the company, shall have notified the other in writing that such party demands an appraisal, such right to an appraisal shall be waived; the appraisers together shall then estimate and appraise the loss, stating separately sound value and damage, and, failing to agree, shall submit their differences to the umpire ”

“ In establishing figures for use in a valuation, it would appear to be better to base them on an analysis of actual transfers than to undertake to fix values by any methods of examination and personal appraisal. Enough instances of the wide divergence of expert opinion have been cited to show conclusively that such a method, applied to the thousands of acres of a large corporation, may lead to serious error. ”

“ Making a theoretical estimate of the probable, future, average, annually accruing deterioration of certain property to provide an item in bookkeeping accounts of operating expense has nothing whatever to do, in making an appraisal, with fixing the definite amount of absolute, actual, or accrued depreciation which depends upon the present condition of physical property, determinable from inspection and not upon historical documents, depreciation funds, or disputed theoretical conclusions. ”

“ The experience of the writer, in the years that have passed since these appraisals, leads him to the opinion that the difficulty of estimating values on an old property are such that in many cases an appraiser might add, with perfect propriety, even more than 10% for the contingency item. ”

“ Performance appraisal of staff is an on-going process. While appraisal reports would normally be completed annually, regular communication between managers and staff on performance is essential. Transparency and objectivity of the appraisal process are also emphasised. ”

“ APPRAISAL- Not later than 90 days after the date of enactment of this Act, the Secretary shall complete an appraisal of the Federal land. The appraisal shall be completed in accordance with the `Uniform Appraisal Standards for Federal Land Acquisitions' and the `Uniform Standards of Professional Appraisal Practice'. All costs associated with the appraisal shall be born by Turnabout Ranch. ”

“ Market Value of Stocks and Bonds.—During the progress of the appraisal of 1900 an independent force of men was engaged in studying the market values of stocks and bonds of Michigan roads with a view to securing information on every possible line that would aid the appraiser in reaching proper conclusions, or enable him to check his figures. ”

“ A trustworthy appraisal; an account showing the result of recent operations of the business; an accurate determination of the number of creditors, the amounts of their respective claims, and the extent to which collateral given or payments made to them might be deemed preferences; these were facts which might have influenced the court in deciding whether the plan should be approved or should be approved only upon a public sale. ”

“ The writer is of the opinion that in this particular phase of the work, the practice adopted in the Michigan appraisal was considerably in advance of more recent valuations. Each particular structure or piece of equipment should be examined and its condition noted; special features should be fully described and careful record made of everything that would tend to affect the value. The argument has been often made that the fixing of a percentage of depreciation by a man in the field is purely arbitrary and amounts to nothing but a guess. ”

“ No allowance is made for working capital with which to carry on the business."
All the appraisals of physical property have been made on the basis of securing a figure representing the cost of reconstructing the property in the condition in which it existed on the date of the appraisal, including only items properly chargeable to capital, cost of road, and equipment. ”

“ By the statute this value is to be ascertained by an appraisal, and it is conclusively presumed to equal the obligation, unless the maker of the note is given an opportunity to be heard as to this appraisal. ”

“ Franchises, as they exist here, are not regarded as having value, unless from unusual circumstances. "Going concern" value is recognized, but its money measure is sought through other channels than present net earnings.
The author's emphasis on the necessity for eliminating the personal equation, as far as possible, is commendable, but a large exercise of discretionary judgment is inseparable from the process of appraisal. The fullest investigation of all pertinent facts should be made. Too much must not be expected from rules and formulas. ”

“ The classification and arrangement of the information as to the property to be valued, the costs and prices of the various materials entering into construction, the making and checking of such tables as may be required for estimating, the computing, checking, filing, indexing, and the various other routine details of work need not be referred to specially, as they must be worked out for each appraisal. The matters of principle that will be met are more important, and, while it would be impossible to mention all that may come up, it may not be amiss to refer to a few. ”

“ Departmental management is encouraged to establish assessment panels to undertake levelling and moderating work among appraisal reports where necessary, identify under-performers or outstanding performers for appropriate action, adopt other management tools including target-based assessment and competency-based assessment, and ensure appraisal reports are written comprehensively, objectively and on time. ”

“ The Act of 1883, § 5, provides for an appraisal and an advertisement for three months setting forth the appraised value and that the vessel will be sold to the offerer of the highest price above the appraised value, etc. ”

“ Unchangeable only for the period under consideration and as regards the purpose of the appraisal. This value varies from year to year, depending on business conditions and on earnings of the company.
Non-Physical Values and Methods for Their Determination. In the published articles treating on the subject of valuation, much stress is laid on the intangible or non-physical elements of value. They have been termed "going concern values," "business values," "good will values," "franchise values," as well as "non-physical" and "intangible" values. ”

“ To help correct this inequity, BPR late in 1956 required that appraisal and negotiation functions be separated. The appraiser would appraise the fair market value, the reviewing appraiser would review all appraisals and approve the amount to be offered the property owner, a trained and qualified negotiator would visit the property owner, explain the highway improvement and the need for the property, and present in writing the amount approved by the reviewing appraiser as the full fair market value of the property to be purchased. ”

“ When the section was amended after the Radford case, the committee reports treated the paragraph of sub. § as quoted in note 3 separately from the succeeding numbered paragraphs and the language connotes the idea that the proviso relates only to appeals from the appraisal. The comment is as follows: 'It provides that the referee, under the jurisdiction of the court, shall designate and appoint appraisers, to appraise all of the property of the debtor, at its then fair and reasonable market value. ”

“ Startup funding. Sec. 1109. Roster of State certified or licensed appraisers; authority to collect and transmit fees. Sec. 1110. Functions of the Federal financial institutions regulatory agencies relating to appraisal standards. Sec. 1111. Time for proposal and adoption of standards. Sec. 1112. Functions of the Federal financial institutions regulatory agencies relating to appraiser qualifications. Sec. 1113. Transactions requiring the services of a State certified appraiser. Sec. 1114. Transactions requiring the services of a State licensed appraiser. ”

“ Under section 10 it was the duty of the appraiser to ascertain, estimate, and appraise the actual market value and wholesale price of merchandise imported, and the number of yards, parcels, and quantities. And evidently this ascertainment involves character and quality as well as value, since the statement, invoice, or entry must be true in respect of the character of the goods as well as of their value. ”

“ The appraisers take an oath diligently and faithfully to examine and inspect such goods, wares, and merchandise as the collector may direct, and truly to report, to the best of their knowledge and belief, the true value thereof. ”

“ The last procedure requires discussion; the rest is self evident. In our business isolation is comparatively easy, inasmuch as any individual statement, any visual impression, any effect, etc., may be abstracted without difficulty. Much harder is the determination of its value. If, however, we clearly recognize that it is necessary to express the exact value of each particular source of evidence, and that the task is only to determine comparative valuation, the possibility of such a thing, in at least a sufficiently close degree of certainty, must be granted. ”

“ Appraisers, it is said, are to appraise, estimate, and ascertain the true market value of such imports, whether of greater or less value than that expressed in the invoice and entry; but the decisive answer to that suggestion is that their duties are regulated by the act of Congress under which they act, and inasmuch as it is provided that the duties shall not under any circumstances be assessed upon an amount less than the invoice or entered value, it is clear that the appraisers have no authority to make any such appraisement as that which they were requested to make by the collector. ”

“ This court is authorized and required to ascertain and assess the value of the land 'by appointing three competent and disinterested commissioners to appraise the value or values thereof, and to return the appraisement to the court.' The duty required of the appraisers is to appraise the value of the land, and to return to the court an appraisement not differing from their belief of its value, but in accordance with that belief. If they believe the aggregate value exceeds the amount named in the act, how can they escape the obligation to say so? ”

“ As the examinations of appraisers are made the basis of the general classification of importations for the imposition and assessment of duty, it becomes necessary that appraisers shall closely inspect the articles ordered for appraisement, and where they retain doubts concerning the quality or denomination of articles they shall submit samples thereof, with their opinions, to collectors, for transmission, in case of disagreement, to the secretary of the treasury. ”

“ It is not necessary here to reproduce the computations, as we are satisfied, after a careful examination of the evidence, that while the methods of estimating value, and of apportionment, which have been disapproved in the discussion of the cases of the other companies, are subject to the same objections in this case, so far as they have been employed, the margin of error which may be imputed to them is not sufficiently great to change the result. ”

“ Mary Bell said that that was not strange, for she believed that lawyers' papers were only meant for lawyers to understand.
The appraisers came about this time to make an inventory of the property. They went all over the house and barns, and took a complete account of every thing that they found. They made a list of all the oxen, sheep, cows, horses, and other animals, putting down opposite to each one, their estimate of its value. They did the same with the vehicles, and farming implements, and utensils, and also with all the household furniture, and the provisions and stores. ”

“ The appraisers or the collector and naval officer, as the case may be, may call before them and examine,up on oath, any owner, importer, consignee, or other person, touching any matter or thing which they may deem material in ascertaining the true market value or wholesale price of any merchandise imported, and require the production, on oath, to the collector, or to any permanent appraiser, of any letters, accounts, or invoices in his possession relating to the same. ”