REALTOR® Magazine Online: Valuation Asset Accumulation Approach

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Valuation Asset Accumulation Approach

	Historical	Fair Market
	Cost	Value
ASSETS
Current Assets
Cash and equivalents	$30,000	$30,000
Receivable--commissions	80,000	80,000
Receivable--other	2,000	2,000
Other current assets	10,000	10,000
Total Current Assets	122,000	122,000
Non-current assets
Receivable--commissions	40,000	29,000
Office furniture/fixtures	25,000	30,000
Leasehold improvements	5,000	9,000
Total non-current assets	70,000	68,000
Intangible Assets
Database	0	5,000
Name/Image	0	20,000
Trained sales force	0	10,000
Going concern value	0	15,000
Goodwill	0	11,000
Total Tangible Assets	0	66,000
TOTAL ASSETS	192,000	256,000

LIABILITIES AND OWNER'S EQUITY
Current Liabilities
Accounts payable	1,000	1,000
Accrued expenses	30,000	30,000
Total Current Liabilities	31,000	31,000
Non-current Liabilities
Notes payable	10,000	10,000
Total Non-current Liabilities	10,000	10,000
TOTAL LIABILITIES	41,000	41,000

Total Liabilities and Owners Equity	192,000	256,000

TOTAL OWNER'S EQUITY	150,000	215,000

Reprinted with permission from the Real Estate Business Series: Value of a Real Estate Brokerage Firm, NATIONAL ASSOCIATION OF REALTORS^®, 1995

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