Cost Approach-compares the item being appraised with the cost to replace (by purchase, production or reproduction) the item with a new or comparable substitute.
Critical Assumptions-are assumptions, directly related to a specific assignment, which could be contrary to actual fact and which, if contrary to actual fact, could result in a different value conclusion.
Fair Market Value-(FMV) is a value defined by a legal or regulatory jurisdiction and varies with individual jurisdictions. For federal uses such as estate and gift tax or charitable contributions, fair market value is the most probable price at which property would change hands between a willing buyer and a willing seller, neither being under any complusion to buy or sell, both having reasonable knowledge of all relevant facts, and with the sale being made to the public in the most relevant market taking into consideration the location of the property.
Fractional Appraisal-is an appraisal in which a value estimate is made on one of the component parts or a percentage of an item without regard to the effect of the component's separation from the whole.
Functional Obsolesence-is the passing out of usefulness due to the inablility of the item to produce the desired results (due to inadequacy, unattractive style, poor or inefficient design, etc.) and to the availability of a new replacement capable of achieving the same results. The old and the new items must be of comparable design and category.
Limiting Conditions-are conditions that materially affect the appraisal process and, as a consequence, the value conclusion.
Market Value-is the most probable amount of money a buyer would pay and a seller would receive for an item within an identified market. It is similar to fair market value except that the lack of compulsion to buy or sell is removed, i.e., the sale must be consummated, and the assumption of a sale within a specified time frame is added. In some jurisdictions market value and fair market value are used interchangeably.
Net Value-is a term commonly used in equitable distribution proceedings (divorce, business dissolution, estate division) to indicate the market value of property less any encumbrances (such as liens or debt) or expected selling commissions or costs, which would serve to reduce the property's market value.
Provenance-is the origin and history of the property, such as its past ownership, exhibitions showing the item, literature mentioning the particular property, etc.
Replacement Cost New-is the cost necessary to replace an item of personal property with a new item of like kind, quality and utility. It considers that items may be upgraded to the latest model or style.
Replacement Cost Used-is the cost necessary to replace an item of personal property with an equivalent item having similar appearance, quality, condition, age, authorship and utility.
Sales Comparision Approach-involves the comparison of the subject property with similar properties, which have been sold in the past.
Value-is the monetary worth which an informed purchaser would offer in exchange for an item of personal property taking into consideration a given market condition (i.e., within a given market at a specific point in time).
Art Related Terms
Encaustic-Painting done with pigment mixed with beeswax and blended with heat.
Etching-The process of making a design on a metal plate by means of the action of acid. The design is scratched through an acid-resistant coating, or etching-ground, with a needle, exposing these parts of the metal beneath. The plate is then immersed in an acid bath, where the acid bites into the lines of the design. The longer the plate is left, the deeper the lines become. Repeated bitings may be used to empasize certain parts of the design, the rest being protected (stopped out) with varnish. This technique is often combined with Engraving.
Giclee-Computer controlled, fine art print making process. Similar to the look of a serigraph but no screens are used. It uses a very fine spray of ink, 15 microns in size, about 4 times smaller than a human hair. The microscopic jet-stream is controlled by a crystal frequency. The print is then coated with up to 15 layers of waterproof U.V. varnishes.
Lithograph-A print made by drawing on fine-grained porous limestone or on a zinc plate with greasy material, then wetting the stone or plate and applying greasy ink, which will adhere only to the drawn lines. Dampened paper is applied to the stone and is rubbed over with a special press to make the final print.
Mixed Media-A technique involving the use of two or more artistic media such as ink and pastel or painting and collage. The various media are combined to create one composition.
Oil paint-A slow drying paint made when pigments are mxed with an oil, linseed oil being the most traditional. The oil dries with a hard film and the brightness of the colours are protected.
Print-An image which exists in multiple copies, and has been taken from an engraved plate, woodblock, silkscreen stencil, lithographic stone, photographic negative, etc.
Serigraphy-A modern colour printing process based on stencilling. Ink or paint is brushed through a fine screen made of silk, and masks are used to produce the design. These can be made of paper, or from varnish applied to the silk itself. Andy Warhol was notable exponent.