APPRAISAL APPROACHES
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.
Cost Approach
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.
Income Approach
The Income Approach is based on determining the present value of the future benefits of
ownership. Calculation methods may use:
- Annualized capitalization method
- Discounted cash flow (DCF) analysis
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.
- Recommended Links
- Contact Us
AEROMAX, USA
Harry Ingram,
Senior Aircraft Appraiser
74 Lakeside Ln
Kerrville, TX 78028
Cell: (830) 446-1064
Email: aeromaxusa@gmail.com
Senior Aircraft Appraiser
74 Lakeside Ln
Kerrville, TX 78028
Cell: (830) 446-1064
Email: aeromaxusa@gmail.com
- APPRAISAL STANDARDS