Business, Legal & Accounting Glossary
A method of depreciation that values an asset at the beginning of an accounting period and again at the end.
This is a method of depreciation that values an asset at the start of an accounting period and again at the end of said period.
A determination of the value of something, such as a house, jewellery or stock. A professional appraiser — a qualified, disinterested expert — makes an estimate by examining the property, and looking at the initial purchase price and comparing it with recent sales of a similar property. Courts commonly order appraisals in probate, condemnation, bankruptcy or foreclosure proceedings in order to determine the fair market value of a property. Banks and real estate companies use appraisals to ascertain the worth of real estate for lending purposes. And insurance companies require appraisals to determine the amount of damage done to the covered property before settling insurance claims.
Any diminution in value is charged as an expense to the profit and loss account.
An appraisal is a professional evaluation of the current market value of real, personal or intangible property. A qualified appraiser typically performs an appraisal. An appraisal is usually required when property is sold, insured or financed. The most common usage of the term appraisal is that associated with a real estate appraisal. A real estate appraisal provides written justification for the price of a piece of land, a house or a commercial building. The real estate appraisal is primarily based on an analysis of comparable sales of nearby properties. An appraisal can help a potential buyer determine what price to offer while assisting the lender with mortgage requirements. Other items that frequently go through the appraisal process include jewellery, fine art, antiques, aircraft, businesses and certain equipment. An appraisal is also used for tax purposes. There are two primary types of appraisal: fee appraisal (appraisal by a contracted appraiser who is paid a fee) and a mass appraisal (appraisal of many properties using a statistical approach conducted by a government agency).
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This glossary post was last updated: 22nd April, 2020 | 5 Views.