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(Updated June 2012)
Valuing the intangible? Understand the distinctions between business value, going-concern, and goodwill—and find out how these concepts apply to hotels & motels, retail establishments, and special purpose properties—in this updated field guide.
Terminology
BUSINESS ENTERPRISE VALUE (BEV)
"A term applied to the concept of value contribution of the total intangible assets of a continuing business enterprise such as marketing and management skill, an assembled work force, working capital, trade names, franchises, patents, trademarks, contracts, leases, and operating agreements." (The Dictionary of Real Estate Appraisal, 4th ed., Appraisal Institute)
GOING-CONCERN VALUE
"An operating business enterprise that is expected to continue." (The Dictionary of Real Estate Appraisal, 4th ed., Appraisal Institute)
GOODWILL
"An intangible, salable asset arising from the reputation of a business; the expectation of continued public patronage; including other intangible assets like trade name and going concern value...," (The Language of Real Estate, 5th ed., John W. Reilly)
Valuing the Intangible
Using TEEM-Work to Extend Your Reach on the Real Estate/Business Value Continuum, (The Appraisal Journal, Summer 2011). Q
Exiting your business, (Electrical Apparatus, July 2011). Q
Defining the intangible asset valuation assignment, (Construction Accounting & Taxation, May/June 2011). Q
Market Value is Market Value, Right?, (The RMA Journal, May 2011). Q
Relationships between the overall property and its parts, and the three approaches to value, (The Appraisal Journal, Winter 2009). Q
Customer relationship assets and separability from goodwill, (Valuation Strategies, Sept./Oct. 2009). Q
The intangible intangible: increasing the value of a deal using personal goodwill, (Corporate Taxation, Sept./Oct. 2009). Q
Enterprise component allocation: methodology discussion, (Real Estate Issues, Spring 2009). Q
Hotels & Motels
Inside the valuation of the Yellowstone Club, (Real Estate Finance, Oct. 2009). Q
Valuing limited-service hotels: a pragmatic framework from a broker's perspective, (The Appraisal Journal, Winter 2008). Q
Retail Establishments
Innovation in Retail Business Models, (Journal of Retailing, July 2011). Q
A Prescription for Assessing Drugstores, (Journal of Property Tax Assessment & Administration, 2010). Q
Building retail tenant trust: neighbourhood versus regional shopping centres, (International Journal of Retail & Distribution Management, 2010). Q
"Review Articles: What We Know About Shopping Centers", (Journal of Real Estate Literature, 2009). Q
Local economic analysis for shopping center appraisals, (The Appraisal Journal, Spring 2009). Q
Special Purpose Properties
Valuation Consideration in the Employee Purchase of the Construction Company, (Construction Accounting & Taxation, July/Aug. 2011). Q
Valuing Physician Medical Practices, (Valuation Strategies, May/June 2011). Q
Appraising interesting holes in the ground, (The Appraisal Journal, Summer 2009). Q
Nursing facilities: assets, interests, and ownership structures, (The Appraisal Journal, Summer 2009). Q
Industrial incubators: key characteristics that impact value, (The Appraisal Journal, Winter 2008). Q
eBooks & Other Resources
eBooks.realtor.org
The following ebooks and digital audiobooks are available to NAR members:
Business valuation and taxes: procedure, law and perspective (Adobe eReader)
Business valuation for dummies (Adobe eReader)
The market approach to valuing businesses (Adobe eReader)
Real estate market valuation and analysis (Adobe eReader)
The Small Business Valuation Book: Easy-to-use Techniques That Will Help You... Determine a Fair Price, Negotiate Terms, Minimize Taxes (Adobe eReader)
Books, Videos, Research Reports & More
The resources below are available for loan through Information Central. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Information Central at 800.874.6500 for assistance.
Valuation by comparison: residential analysis and logic, (Appraisal Institute, 2007). HD 1387 Ap6vc
Fundamentals of industrial valuation, (International Association of Assessing Officers, 2007). HD 1387 In8f
Business valuation bluebook: how successful entrepreneurs price, buy, sell and trade businesses, (Facts on Demand Press, 2005). HD 1387 Si4
Real estate market valuation and analysis, (John Wiley & Sons, Inc., 2005). HG 4523 K12
Business valuation discounts and premiums, (John Wiley & Sons, Inc., 2001). HD 1387 P88bv
Field Guides & More
These field guides and other resources in the Virtual Library may also be of interest:
Field Guide to Hotel/Motel Properties
Field Guide to Retail Property
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