In litigation and divorce proceedings in which the value of an aircraft is a key issue, it is unlikely that an opinion of value provided by the parties involved in the litigation would be acceptable. Instead the court would want the opinion of an independent third–party expert, an aircraft appraiser. In the case of a business merger or combination, when one business is acquiring another or businesses are combining, it is a Financial Accounting Standards requirement that the purchase price be allocated to the tangible and intangible property included in the transaction. Tangible property potentially consists of an aircraft as the real property. Intangible property includes all items of value in a business that are not tangible assets and could include stock, bonds and goodwill which is the value of contracts, brand value, and reputation. Professional aircraft appraisers can provide opinions of the value of this property types.

Essential Elements of a

Credible Aircraft Appraisal

Report

A credible aircraft appraisal report clearly identifies the aircraft appraised, the scope of work performed by the appraiser, the client and other intended users, and the intended use of the report. The appraisal report must also include the definition of value (e.g., fair market or replacement value), the effective date, and the subject object’s relevant characteristics. The data and analysis required to support the opinion of value must be effectively communicated.

WHY DO I NEED AN

AIRCRAFT APPRAISAL

AND/OR VALUATION

Aircraft as Business Collateral

Here are some of the scenarios in which an AERONUVO aircraft appraisal would be required: • Finance • Purchase Price Allocation • Litigation • Property Tax • Divorce • Charitable Donation • Purchase Negotiations • Buy/Sell Agreements • Establish Depreciation Schedule for Income Tax Purposes • Internal Financial Reporting An aircraft appraisal is an opinion of value. In many cases, aircraft are appraised because an opinion of value is required to establish a price for a purchase or sale, for financing purposes, or for financial reporting requirements. If a business owner is requesting a loan from a financial institution and is an aircraft as collateral, the financial institution will require an appraisal to assess the adequacy of the collateral.

There is no single standard aircraft appraisal report form, format, or style. All reports must contain sufficient information to enable the intended user to properly understand the conclusions and to be credible. Regardless of the intended use of the appraisal report, the appraiser should prepare the report in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP) and include: • A complete description of the aircraft in sufficient detail to identify the aircraft (may include photographs). • Methods of analysis and data used to provide a value conclusion and the rationale for value. • A signed certification similar to the one included in USPAP which includes a statement that the aircraft appraiser is not biased and does not have a present or prospective interest in the property.