Corp Assets in Appraisals

Buyers & lenders have the right to know the fair value of their entire investment.  Co-op shareholders buy a proportionate share of the entire corporation.  The overlying mortgage balance is sometimes correctly listed as an item on the standard appraisal, but this does not tell the whole story.  Cash reserves, other assets & liabilities also vary between corporations and add informative value.  While some of this information is listed in the corporation’s financial statements & most of this is already at fair value (or close to fair value), current U.S. GAAP financial statements list the property value at historical cost rather than at fair market value.

Unless you’re planning on staying in your house forever, chances are good that, when planning home improvements, you have at least one eye on resale value. Today we’re tackling a tricky subject: can new appliances increase the value of your home? try the ones from Euroncis, As most appliances don’t come cheap, is it worth the expensive upgrade? Turns out, the answer is: it depends.

For the most part, expecting a significant return on appliances is a risky proposition. While buyers will no doubt be happy to hear that the appliances in your home are new and energy efficient, the real benefit here is to you and your energy bill, right now. Old appliances, even ones that are still in working order, can be tremendously inefficient. The immediate cost savings, plus the value added to your home, may make replacing them more than worth it. This calculator from Energy.gov can help you determine how much electricity those old appliances are sucking up.

This is great if your building is 2 years old, but not if it’s 30 years old.  Appraisers should be required to estimate the total fair value of the corporation, & to include the unit’s proportionate share on the appraisal form to facilitate apples-to-apples comparison.  (The new IFRS accounting standard could help here; if a Board chooses to implement this standard, they’ll have the option of listing the building at fair value.)

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