MTS Journal

2011  •  Volume 27  •  Issue 1

This double issue contains nine articles and a copy of the MTS Definitions of Value. Articles cover topics such as Orderly Liquidation Value, the Financial Reporting Process, modeling, inventory valuations, and functional obsolescence.
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Articles from this Issue

Editor's Corner

A special note from the Editor of ASA’s MTS Journal.
PAGE 4 Sharon Desfor, ASA, MRICS

Excerpt from Governor's Report to the MTSC

News from ASA’s Machinery and Technical Specialties Committee.
PAGE 5 Charles C. Dixon, ASA

Definitions of Value Relating to MTS Assets

On July 25, 2010, the MTS Committee adopted revised definitions of value which all appraisers may now use.
PAGE 7 The Machinery & Technical Specialties Committee of the American Society of Appraisers

The Aftermath of the Perfect Storm

The huge surplus of used Injection Molding Machinery and Equipment which hit the market in 2009 has largely cleared and resale values show significant signs of firming.
PAGE 9 Robert S. Risbridger and Kenneth M. Heyse, ASA

What is Orderly Liquidation Value?

Orderly Liquidation is defined by the ASA as “an opinion of the gross amount, expressed in terms of money, that typically could be realized from a liquidation sale, given reasonable time to find a purchaser(s) with the seller selling on an as-is basis.
PAGE 13 Leslie H. Miles, Jr., FASA

Financial Reporting Process

Beginning with the fixed asset records as the basis for the valuation has its limitations and appropriate due diligence must be performed in order to perform an accurate and credible valuation.
PAGE 16 Douglas R. Krieser, ASA, FRICS

Valuation Modeling

In 2010, ASA launched its first “Modeling Course.” Participants gained awareness training and the skills to discuss and manipulate fixed asset accounting, engineering data systems and/or field developed data for various valuation applications.
PAGE 22 Alexander F. Rudin, ASA, CG/GA and Shelby St. John

Calculating the Economic Useful Life and Forecasting Residual Values for IT Equipment

This article explains the calculation of economic useful life, using the example of a Dell server.
PAGE 35 Peter Daley, ASA

Reducing Banker Lending Risk: Inventory Valuations – More Science than Art

This article illustrates the modeling used today to develop expected liquidation values under various scenarios, and proposes additional models that should be used to reduce risk and improve the accuracy of advance rates.
PAGE 40 Barry Gunderson, CPA, CMA, CIA, CCM, CPIM, CSCP

Functional Obsolescence: Real Life Stories

Functional obsolescence (“FO”) is an often misunderstood form of depreciation. Depending on the age, technology, and efficiency of the subject property, the impact of FO can vary widely.
PAGE 45 Michael J. Remsha, P.E., ASA, CMI, and Kevin S. Reilly, ASA