Fas 141 Allocations

[Sam Sanderson]

Anyone here done much of these? It seems that all we do nowadays are allocations and was curious who else is active in this niche? Thanks!!

 

[Mike Boyd]

Never heard of it, Sam. Exactly what IS Fas 141?

 

[Sam Sanderson]

FAS 141 is the Financial Accounting Standards Board mandate that states real estate (and business) acquisitions need to allocate the purchase price of a property (or business) between tangible and intangible assets.

For example, an office building is comprised not only of land and building values, but also unamortized TI's, leasing commissions, legal costs, as well as above/below market lease values. Additionally, a portion of the cost is allocated to leases-in-place, which is a value attributed to the expenses avoided by having purchased the property with pre-existing leases (i.e. whatever the market downtime is multiplied by the market rent).

But it seems we're really the only company extremely active in this niche market...

No one else has been engaged to do anything like this?

 

[Mike Boyd]

I can see why your company has no competition. Who would need this type of an appraisal? Just curious.

 

[Carnivore]

http://www.valuquest.com/FASB.htm

 

[Sam Sanderson]

Mostly large REIT's seem to be interested as they have to report to the SEC since they're public....

 

[Eric Bishard]

might have more luck with this one in the Commercial/Industrial Appraisals forum. Normally residential appraisal companies do not do that type of work.

Is your company ValuQuest?

 

[Sam Sanderson]

No, we're not Valuquest. We're a consulting firm in which RE valuation is only a portion of the overall practice.

 

[Oregon Doug]

A large portion of my career was in preparing and presenting "acquisition reports" for several large REITS during the 70's & 80's, but I don't recall the term "FAS-141". We had an individual that did the business valuations and another to provide machinery & equipment values.

Oregon Doug

 

[Eric Bishard]

If you were ValuQuest I was going to try and sell you on a new website.