The three generally accepted appraisal approaches.
The Uniform Standards of Professional Appraisal Practice (USPAP) provide three generally accepted appraisal approaches (methods to estimate asset value). They are the Cost Approach, the Income Approach, and the Market or Sales Comparison Approach. Appraisers use their expertise to determine the approach that is most relevant for each project.
This Approach is based on the principle of substitution. It is calculated by taking the current cost of replacement or reproduction new, and deducting various elements of depreciation: physical deterioration, functional and economic obsolescence.
The Income Approach is based on determining the present value of the future benefits of ownership. Calculation methods may use:
Sales Comparison Approach
This Approach is also known as the Market Approach. It is also based upon the principle of substitution. It is calculated by adjusting recent sales and offering prices of similar aircraft to arrive at the most probable selling price of the subject being evaluated.