REMAINING USEFUL LIFE
It is the remaining capacity of service, expressed in years, that can be provided by an asset in a permanent manner in its current condition, with no need of any major repairs or refurbishment.
The cost approach recognizes that no prudent investor will pay more for a property than the cost of replacing it new. Therefore, it is necessary to obtain a New Replacement Cost. Which is defined, as an estimate of the cost of replacement of the property under appraisal with units of the same class or similar units, under new conditions. For purposes of obtaining an adequate value of the assets, the New Replacement Cost has to be depreciated.
DEPRECIATED REPLACEMENT VALUE
It is the value of the assets in use, considered as an integral part of an ongoing company, taking into account its depreciation and target market, leaving aside any judgment on the profits generated by the assets to justify the investment made in them. The foregoing definition is applicable in the valuation of assets in use of companies, where no study of earnings or return on investments has been conducted, which may serve as support for the justification of its value.
It means the price at which an asset would change hands between a purchaser and a seller, both willing to perform the operation, both with sufficient knowledge about the permitted uses of the assets and the facts that affect it, neither the purchaser nor the seller being forced to purchase or sell, and both under equal conditions.
ORDERED LIQUIDATION VALUE
It is the price of an asset exposed to the Market with reasonable time to find a purchaser, having both, purchaser and seller, the knowledge of the uses and purposes for which it is suitable and capable to be used; being the seller forced to sell and the purchaser desirous but not forced to purchase. We consider 4 months as reasonable time.
FORCED LIQUIDATION VALUE
It is the price of an asset exposed to the Market for its immediate sale, having both, purchaser and seller, knowledge of the uses and purposes for which it is suitable and capable to be used; being the seller forced to sell and the purchaser desirous but not forced to purchase.