8/9/2019 Machinery and Equipment Value Definitions

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MACHINERY AND EQUIPMENT VALUE DEFINITIONS

Forced Liquidation Value - The estimated gross dollar amount which could

typically be realized from a properly advertised and conducted public sale

held under forced or distressed conditions and with a sense of immediacy.Inherent in the definition is the disposal of all assets in an “as is” conditionwith all expenses of removal and transportation incurred by the buyer. It is

assumed that the sale would be conducted by a qualified seller withexperience in selling this type of equipment.

Orderly Liquidation Value - The estimated gross dollar amount whichcould typically be realized from an orderly sale of the subject assets on a

negotiated basis, held under forced or distressed conditions, with a limitedmarketing period. Inherent in the definition is the disposal of all assets in an

 “as is” condition with all expenses of removal and transportation incurred by

the buyer. It is assumed that the sale would be conducted by a qualified

broker familiar with this type of equipment. Note: the specific time period foran orderly liquidation will vary based on the type and quantity of machinery

& equipment involved. CEA’s formal reports will state the anticipatedliquidation period.

Fair Market Value - The amount, expressed in dollars, which couldreasonably be expected to exchange between a willing buyer and a willing

seller with each aware of any factors affecting value or utility and withneither under compulsion to buy or sell. It is further assumed that all itemswould be sold "as is, where is" and without any warranties or guaranteesprovided.

Fair Market Value-In Continued Use - The anticipated selling price whichwould be agreed upon between a willing buyer and a willing seller for all

items under prevailing market conditions and including transportation andinstallation. Neither party is considered to be under duress and both are

assumed to be knowledgeable and aware of all relevant facts affecting theselling price. No warranties or guarantees are assumed to be provided by the

seller and all items are sold on an "as is" basis. It is assumed the subjectequipment would continue to be operated at its present site and that thebusiness earnings support the concluded value.

Fair Market Value-Installed - The anticipated selling price which would beagreed upon between a willing buyer and a willing seller for all items underprevailing market conditions and including installation. Neither party is

considered to be under duress and both are assumed to be knowledgeableand aware of all relevant facts affecting the selling price. No warranties or

guarantees are assumed to be provided by the seller and all items are soldon an "as is" basis. It is assumed the subject equipment would be available

for continued use at its present location.

8/9/2019 Machinery and Equipment Value Definitions

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Fair Value - The amount at which the asset or liability could be bought orsold or incurred or settled in a current transaction between willing parties

(i.e., other than a forced or liquidation sale). Thus the fair value of thereporting unit refers to the amount that the whole unit could be bought orsold for in a current transaction between willing parties.*

*In the case of the purchase an ongoing enterprise, Fair Value is typicallyfurther defined as Fair Market Value-In Continued Use.

Replacement Cost - The current cost new, including installation, of a similarnew property having the nearest equivalent utility as the property beingappraised. This differs from Reproduction Cost which would entail the current

cost of an exact replica of the property being appraised.

The preceding value definitions are the basis for the majority of CEA’s

machinery & equipment appraisals. In instances where value is dictated by acontract, state or federal law, or other such authority, the mandated

definition is used. These definitions are based on the text Valuing Machinery& Equipment (2005), published by the American Society of Appraisers.Although the exact published definition may not be used, CEA’s definitions

reflect the same basis and key points of the published definitions. Theexception to this is Fair Value, for which the definition published by FASB(Financial Accounting Standards Board) is used verbatim.