Cost - from 5,000 rubles
Terms - from 3 days
Article 130 of the Civil Code of the Russian Federation determines that space flying objects and means of air transport must undergo a mandatory state registration procedure, and according to the classification they are classified as real estate. The assessment of the listed objects is carried out by analogy with the assessment of vehicles - their technical characteristics, functional purpose and operating features are assessed.
When assessing aircraft, a wide variety and classification of types of aircraft are taken into account. Based on their functional purpose, the following categories of aircraft are distinguished:
- for national economic purposes (passenger, cargo and agricultural aircraft);
- research and experimental apparatus;
- military aircraft and helicopters;
- sports light aircraft and devices.
Based on the principle of activity there are:
- aerodynamic aircraft;
- aerostatic;
- flying spacecraft;
- rocket vehicles;
- various hybrid devices.
Aircraft are assessed in the following situations:
- when completing purchase and sale transactions;
- during the receipt of loan funds and registration of collateral;
- when adding the aircraft to the authorized capital of the company;
- in the process of reorganization of a company (enterprise);
- in order to reduce company taxation;
- to optimize rent accruals;
- when resolving property disputes;
- in the process of confirming customs value;
- when insuring property;
- to determine the damage received;
- according to the procedure for decommissioning an aircraft from the balance sheet;
- in the process of revaluation;
- to attract financial investments.
If there is a need to evaluate aircraft, you need to call the company’s specialists. After this, within 24 hours, in agreement with the customer and if necessary, experts will arrive at the location of the aircraft for a preliminary familiarization with the facility and drawing up an agreement to perform work to evaluate the facility.
At its core, aircraft assessment involves the assessment of passenger and cargo aircraft, helicopters and other aircraft. Quite often, an assessment is ordered not of the aircraft, but of its components for their subsequent replacement, for example, a navigation system or engine.
When carrying out work to evaluate aircraft, one of the following approaches or a combination of them is used:
Cost-effective approach. The cost of the aircraft is calculated based on the specific costs that would be incurred by the buyer of the property being assessed if he brought it to perfect condition. When using this method, it is generally accepted that the buyer will not pay a significant amount for the aircraft, equal to the cost of a new aircraft. During the assessment process, the expert analyzes the manufacturer's selling prices, takes into account costs, indexes calculations and makes a full calculation.
Comparative approach. During the assessment, similar analogues are selected and the cost of the primary object is adjusted based on a comparison of important characteristics, which include: various physical characteristics, sales conditions and the general state of the market. The statistical modeling technique, often used during the assessment procedure, also deserves attention if it is not possible to use a comparison method or significant material and time costs are required. In some cases, the use of such a technique gives fair and accurate results.
The income approach includes several simple valuation techniques and is based purely on the economic benefits that an investor has the right to expect from purchasing an aircraft.
For a specific case of assessing an aircraft, the most effective assessment method is selected, which is a reliable guarantee of exceptional accuracy in calculating the real cost of an aircraft.
To conduct an assessment of air transport, you must have with you originals and photocopies of documents that confirm the right of ownership or use and identify the owner.
List of additional documents required for the assessment:
- actual data of the object, its side and serial number;
- manufacturer's brand;
- date of release and commissioning;
- operational documents (copies);
- description of repairs and upgrades, dates;
- technical condition certificate;
- location of the aircraft;
- manufacturer's guarantees;
- purpose of operating the aircraft.
After the company's appraiser familiarizes himself with the property and formulates clear goals for assessing the apparatus, a complete list of required information and documents will be compiled.
The final cost of aircraft assessment work is determined individually for each aircraft, since there are no similar objects, and the use of different assessment methods and different amounts of work are required.
The cost of assessing the aircraft includes:
- conducting negotiations with the customer;
- photography of an aircraft;
- collection of necessary information and documentation about the aircraft;
- analysis of the information received;
- selection of effective assessment methods;
- full calculation of the cost of an aircraft transport vessel.
Deadlines for completing assessment work.
Air transport aircraft are considered expensive and technically complex compared to other types of equipment.
Aircraft are subject to specific requirements regulated by special regulations, which must be taken into account when assessing air transport. This includes requirements for compliance with the maximum level of safety, compliance with airworthiness, as well as compliance with the necessary flight performance parameters. This is why the assessment requires sufficient time to ensure that all necessary requirements are met. A typical aircraft assessment takes from two days to a month.
How to evaluate air transport yourself?
Air transport is a rather complex object, the assessment of which requires a thorough analysis of all submitted documents. However, you can determine the approximate cost of air transport on your own using Internet services or ad sites. However, it is worth remembering that the obtained data on the cost of the object will be approximate and cannot be used when contacting the authorities or a notary for the reason that such information is not a professional opinion and has no legal force.
How is an air transport assessment report prepared?
The assessment report is an official document ranging from 20 to 80 sheets. In accordance with sections 1 and 2 of the Federal Appraisal Standard No. 3, the appraisal report must be numbered page by page, bound, signed by an appraiser, and also affixed with the personal seal of an appraiser who carries out appraisal activities independently, in private practice, or with the seal and signature of the head of a legal the person with whom the assessor has entered into an employment contract. Often, banks or other clients (for example, another party in a lawsuit) require multiple copies of the report or copies thereof. We are ready to make several copies of the report free of charge if it is really necessary. All subsequent copies of reports will be provided on a fee basis.
Therefore, before coming to our office for a report or calling a courier to deliver it, please check how many copies you need.
What documents will be attached to the air transport assessment report?
The air transport assessment report is accompanied by all documents that were received from the customer and which contain quantitative and qualitative characteristics of the assessment object. In accordance with sections 1 and 2 of Federal Valuation Standard No. 3, the appendix to the valuation report must contain copies of documents that were used for valuation purposes. These documents also include title documents and various conclusions of special examinations, as well as any other documents on the object of assessment (if any). The report is accompanied by documents identifying the customer or details of a legal entity, and photographs of the object, as well as documents from the appraisal company - specialist diplomas, insurance policies and certificates.
What period of time does an air transport assessment have legal force?
In accordance with clause 26 of FSO No. 3 (Federal Valuation Standard), the validity period of the specified final value of the object is considered valid for the purposes of completing a transaction with the specified object, provided that no more than 6 months have passed from the date of drawing up the valuation report. An exception is made only for objects registered upon entry into inheritance.
What should I do if I do not agree with the appraiser’s conclusions regarding the final cost of air transport?
In accordance with paragraph 19 of FSO No. 3, as for the information that is processed during the assessment process, it must be sufficient and reliable. In particular, information is considered sufficient if, when accessing additional information, there is no significant change in the parameters that were used for the purposes of the assessment. In addition, if additional information does not lead to a change in the final value of the value of the valued object, then the initial information is sufficient. As for the reliability of the information, they are such if they fully correspond to reality and enable the customer to correctly interpret the characteristics of the object being assessed and make decisions based on the report data.
In the event that the customer does not agree with the value of the obtained cost of air transport reflected in the report, this may have a number of reasons, in particular the fact that the appraiser was not provided with comprehensive information about the object. For example, the customer kept silent about the presence of encumbrances. One way or another, the value reflected in the appraisal report is advisory in nature. The parties can make a transaction involving an air transport facility at a different price, which they will mutually agree on.
How can I pay for the assessment procedure?
Valuation services can be paid for by all available payment methods, namely in cash at the company’s office, by bank transfer, through QIWI terminals. Financial documents are prepared properly in accordance with the legislation of the Russian Federation.
If the customer is a legal entity, we will prepare an invoice and a certificate of completion of work. If necessary, we can issue an invoice or provide notification of the application of the simplified taxation system.
How can I get an assessment report or where can I pick up the report myself?
The assessment report can be obtained in several ways. The simplest and most common is to pick it up yourself at the company’s office. The report can be delivered to the customer by courier at the location designated by the customer. The whole difficulty of this method is that we will not be able to deliver the report to you for free. You will need to pay the cost of courier delivery.
Sometimes, by agreement with banks, the report can be transferred to the relevant bank branch.
What to do if there are errors or typos in the report?
The likelihood of typos or errors in our documents is virtually eliminated or extremely small, but, nevertheless, if the customer finds any inaccuracies, grammatical errors or typos, our company guarantees that corrections will be made. We independently collect the report, make corrections within a reasonable time, staple it and seal it with the company seal, after which the report is transferred to the customer by the company.
Aircraft are one of the most complex and expensive types of modern technology. When assessing their value, it is necessary to be guided not only by general approaches that consider aircraft as a specific class of property, but also by methods that take into account the specifics of assessing objects that are very different in functionality, principles of operation and design. This material presents a method for determining the market value of civil aircraft (AC) based on the costs of their reproduction, taking into account physical and functional wear and tear.
First of all, it should be noted that, in accordance with Air Code of the Russian Federation (adopted by the State Duma of the Russian Federation on February 19, 1997) aircraft are classified as aircraft that are maintained in the atmosphere due to interaction with air that is not reflected from the surface of the earth or water . Besides, The Civil Code of the Russian Federation classifies aircraft subject to state registration as real estate, and the rest as machinery and equipment . Nevertheless, taking into account the functional purpose and design properties of aircraft, when assessing them, it is advisable to consider them as a single class of machines and equipment.
Over the past few years, the fleet of domestic aircraft has become significantly outdated, both physically and morally. In the very near future, many types of aircraft are subject to write-off. At the same time, airlines often do not have the funds to purchase new aircraft, as a result of which serial production of most types of aircraft has practically ceased. Thus, it is very difficult for an expert to obtain reliable information about the replacement cost of the object in question, since the prices offered by manufacturers differ significantly from the amounts of specific transactions, which are traditionally not disclosed. Therefore, when conducting economic and legal research, a specialist must take into account the characteristics of the primary and secondary, global and regional aircraft markets, as well as structural inflation for the main types of aircraft. The market value of aircraft depends on many factors, the main of which include the principle of operation (aerostatic, aerodynamic, space, aerospace and rockets), functional purpose (research, economic, military and sports), flight performance characteristics (flight characteristics) ), parameters that determine the main operating costs, the maintenance and repair system (MRO), service life restrictions, and so on. The most important distinguishing feature of an aircraft from other types of equipment is the presence of requirements to ensure a given level of safety, airworthiness, and performance characteristics throughout its entire service life. . Fulfillment of these requirements is regulated by special regulations and organizational and technical systems (certification, attestation, licensing).
In accordance with the technical documentation being developed, the main power structures of aircraft are designed based on the condition of ensuring a given time and number of flights (technical resource) . The modern concept of aircraft operation “according to condition” does not have any prescribed resource limitations. Aircraft are used until the end of their economic life, when the cost of repairing them becomes unprofitable.
Therefore, at the initial stage of aircraft operation, a significantly lower resource value (assigned resource) is established, which is subsequently extended to the value specified in the technical specifications or a greater value. The timing of maintenance and repair activities, as well as the maximum performance indicators for aircraft operation, are measured by the duration of operating cycles (running time)
or calendar time. The procedure for increasing assigned resources requires significant financial and time costs, which should be taken into account when performing the examination.
Due to the fact that aircraft designs are constantly being improved, their full replacement cost is often calculated as replacement cost. At the same time, there are several approaches, most of which are based on the construction of calculation or resource-technological models. However, they are practically not applicable for assessing modern aircraft due to the significant complexity of collecting the necessary data. Therefore, to determine the full cost of reproducing an object, information is currently mainly used on the prices offered by airlines, adjusted by introducing the appropriate “bargaining” coefficients (obtained from market data averaged for similar products of the manufacturer in question).
Calculation cumulative wear and tear
(impairment) of an aircraft is made according to the formula:
- Where:
S- the amount of total wear, in shares;
F, V, E- the amount of physical, functional and economic wear and tear, respectively, in shares.
During normal operation physical wear and tear of the aircraft is mainly determined by the operating time in flight and on the ground, as well as time-dependent aging and corrosion processes of materials. The value of F acceptable for maintaining a given level of safety and airworthiness is ensured by a maintenance and repair system, the regulations of which provide for determining the actual level of wear and its elimination. In this case, prompt replacement of failed removable units is carried out during pre-flight and post-flight maintenance. Determining the degree of obsolescence of the most heavily loaded non-removable components of the airframe and engines, as well as their adjustment or replacement, is carried out during the process of overhaul (CR).
Currently, the main form of MRO of domestic aircraft is a planned preventative system, which provides for appropriate maintenance of the aircraft depending on the operating time in flight hours, cycles (take-offs and landings, on-off) and calendar time. The frequency of repair work is established by the assigned resource before the first repair and by the between-repair resources for subsequent repairs.
During the overhaul process, not complete, but partial elimination of physical wear and tear on aircraft and engines is ensured. Therefore, in the calculations we highlight irreparable wear
, the value of which is calculated by the formula:
- Where:
Fn- irreparable physical wear and tear;
NL- economic life expectancy (service life) ? the maximum value of the values of technical and assigned resources;
R.L.- the remaining useful life, defined as the amount of resource remaining before write-off;
E.A.- effective age, calculated as the difference between service life and remaining useful life.
For the aircraft as a whole, as well as for its main long-lived element that determines the functioning and service life of the aircraft (for example, an aircraft airframe, the price of which includes the cost of all components and assemblies with the exception of short-lived elements assessed separately), the proposed assessment methodology is based on the following provisions: 1. The effective service life strictly coincides with the actual operating time reflected in the documentation since the aircraft was produced, and the value of the remaining useful life and the degree of irreparable physical wear are determined by the formulas:
- Where:
A- actual operating time since the aircraft was produced;
i- index of operating hours (for hours flown i = 1, for the number of landings i = 2, and so on).
- Where:
RLki- the period of remaining useful life in calendar time, determined taking into account the possible operating time of the resource with index i for the calendar time remaining before write-off;
Fnki- the degree of irreparable physical wear and tear according to calendar time, determined taking into account the possible operating time of the resource with index i;
NLk- economic life expectancy (service life) according to calendar time;
Ak- calendar time from the moment of aircraft release;
Ri- operating life with index i per unit of calendar time (annual flight hours, number of takeoffs and landings, engine starts per year, etc.), technically possible and realistically feasible under operating conditions (taking into account the principle of the best and most efficient use of the aircraft).
The components and assemblies included in the aircraft as a whole must satisfy the general safety conditions of the aircraft, but they are not subject to the requirement for prompt elimination of physical wear and tear during the pre-flight preparation process.
In the event of a failure or exhaustion of between-repair resources, the MRO system provides for their replacement with subsequent repairs.
Practice shows that with an increase in operating time, as well as as a result of repeated repairs, the failure rate of units, the cost and time of their setup may increase. Thus, there is an additional deterioration in consumer properties and depreciation of aircraft elements, characterized by a nonlinear dependence of the market value of the product on the duration of operating cycles.
In addition, for short-lived units, physical wear in calendar time is determined by the aging processes of the materials of individual parts, which are replaced during the next repair. Therefore, as a rule, the calendar service life of products is taken into account when calculating removable wear and tear and does not affect the amount of irreparable obsolescence.
Calculation of irreparable physical wear of individual units and components of the aircraft can be carried out for each type of operating time and calendar time using formula (2) with an additional assessment of the difference between their effective age and the actual age. The maximum value is taken as the calculated obsolescence value.
Impairment as a result removable physical wear includes the costs required to replace or repair faults to the point where the loss of value of components and assemblies would be determined solely by irreparable obsolescence, as well as the present cost of deferred planned overhauls of elements that are operational at the time of assessment. In this case, calculations are made according to the formulas:
- Where:
ADu- impairment as a result of reversible depreciation;
Suj- cost of troubleshooting the j-th unit;
Crj- cost of planned overhaul of the j-th unit;
Mrji
OMrji- calculated value of the overhaul life with index i of the jth unit;
I- discount rate;
Tji- the calculated value of the time interval before the planned overhaul of the j-th unit, determined by the remainder of the overhaul life with index i;
Rji- operating time of the j-th resource unit with index i per unit of calendar time.
The ratio of the amount of impairment as a result of irreparable and reversible wear and tear to the full replacement cost of the aircraft determines the amount of total physical obsolescence.
Functional wear
is caused by a loss of value caused either by the appearance on the market of cheaper aircraft or vehicles, or by the inconsistency of the characteristics of the aircraft in question with modern standards, flight safety requirements, environmental restrictions, comfort indicators, quality of passenger service, and so on.
Removable functional wear
is measured by the amount of costs to compensate for it through design modifications of the aircraft, officially permitted by the current documentation. Unrecoverable functional wear
is a consequence of deficiencies, the correction of which is currently practically impossible or economically unfeasible, and for a passenger aircraft can be determined using the formulas:
- Where:
ADvn- functional depreciation of the aircraft due to differences in the main characteristics compared to its analogue;
Cb- market value of the analogue;
Nb, Nc- passenger capacity of the analogue and the aircraft under evaluation with similar passenger cabin layouts;
Kb, Kc- seat occupancy rates of analogue and aircraft;
Vb, Vc- cruising speed of the analogue and the aircraft being evaluated;
Hb, Hc- flight hours of the analogue and the aircraft being evaluated, hours per year;
a, b- indicators that take into account the influence of differences in cruising speeds and annual flight hours (depending on the type of aircraft);
NLc, NLb- economic life of the aircraft and its analogue, in flight hours;
Chb, Chc- cost of a flight hour of the analogue and the aircraft being evaluated;
V- the current value of the monetary unit at the end of the economic life of the aircraft being valued;
I- discount rate;
Do- loss of profit for the year;
Np- income tax rate.
Calculation economic (external) wear and tear basically comes down to determining the current value of the loss of profit as a result of using the aircraft over the forecast period of time from the moment of assessment to the termination of operation. An additional type of external obsolescence can be attributed to the loss of value as a result of the transfer of an aircraft from the primary to the secondary market.
The presented mathematical model for assessing civil aircraft formed the basis for the methods approved by the Federal Aviation Service (FAS) of Russia, used by practicing specialists in their work, as well as by educational and methodological centers in the training of independent experts. This approach can be used when calculating the cost of a wider class of machinery and equipment for which the requirements for ensuring the preservation of a given level of safety and basic operational and technical characteristics from the moment of manufacture to write-off when resources are exhausted are met.
Scientific potential 72 organizations are engaged in fundamental research, applied scientific development and development work, including 5 academic institutes, 15 research and development bureaus, and 20 design bureaus. Most of them are federally owned.
Summary. In Samara and the region there are many important factors that make the region attractive:
Favorable natural-geographical location;
Rich natural resources;
Powerful industrial base;
Availability of highly qualified specialists;
Global recognition of research potential;
Developed transport infrastructure, etc.
Against this background, the aviation industry of Samara is one of the fundamental ones in the formation of the region’s economy. The Volga regional department of the Federal Aviation Service of Russia is one of the largest in the country. International airport "Kurumoch", as well as the runway of the IAC "Aviakor" can receive any aircraft. This undoubtedly attracts investors and creates favorable conditions for the aviation business.
The objects of assessment - the Tu-154M airframes are among the most common in Russian civil aviation - they account for 30% of the total passenger aircraft fleet and more than 50% of all passenger traffic in Russia, and the Yak aircraft accounts for% of the Russian aircraft fleet. The aircraft under consideration are the most economical on medium-sized highways and are in steady demand.
Regional conditions for the possible sale or rental of assessment objects satisfactory.
3.2. Legal and Governmental Aspects
The positions of the Russian Government regarding aviation policy are formulated in the Federal Law “On State Regulation of Aviation Development” (January 1998). The development of civil aviation is focused on putting into operation new, more economical aircraft and attracting foreign capital with an equity participation of ≤25% for the development, testing and repair of aviation equipment. Reasonable customs barriers for the purchase of foreign aircraft, new rules for renting and leasing foreign-made aircraft are being worked out.
3.3. Competition and world leaders
The volume of transportation on domestic routes in Russia continues to decline, while on international routes it continues to grow. In Russia, more than 300 organizations have an aircraft operator certificate, of which 57% of air transportation accounts for eight airlines. Only 15 of the largest airlines (Aeroflot, Transaero, Vnukovo Airlines, Domodedovo and others) operate long- and medium-haul aircraft Il-62, Il-96, Tu-204, Tu-154, Boeing 757, Airbus Industry A310 and have the necessary infrastructure to maintain the airworthiness of their aircraft fleet. Over 50 airlines have access to international flights.
According to analysts (Robin Ohlson, SHE Co, etc.), in the next 5 years, the annual growth rate of air traffic in the CIS could be 8.8% for domestic routes and 7.5% for international routes. In this regard, an acute problem arises of updating the aircraft fleet, since a significant part of the aircraft has exhausted or is close to exhausting its service life. Now the Russian aviation industry is not able to provide the required fleet renewal and this requires the acquisition of aircraft in the West.
The most active implementation policy on Russian airlines is carried out by Boeing, offering 727, 737, 757, 747, 767, MD-80 and MD-11 aircraft, and Airbus Industry with A300 and A310 aircraft. This line of aircraft allows you to solve almost all air transportation problems. However, as noted above, only 8-15 Russian airlines can update their aircraft fleet and, therefore, the need for Tu-154 and Yak-42 aircraft will continue in the next 10 years.
4. Regulatory framework
4.1. Standards and regulations
The assessment of the objects specified in this Report was carried out in full compliance with the requirements:
electrical equipment (SU3)
instrumentation (SU4)
aeronautical equipment (SU5)
Airframe between-repair life (Mrji), j=1 (airframe)
i=3, calen.
Remaining airframe service life before repair (OMrji)
i=3, calen.
Discount rate (I)**)
Estimated time until the planned CR of unit “j” for resource “i” (Tji)
TOTAL avoidable physical impairment (ADu)
Physical wear and tear, irreparable
Economic service life (NLi)
i=3, calen.
Remaining useful life (RLi)
i=3, calen.
Fatal physical impairment (Fn)
Functional wear, removable, is measured by the cost of elimination due to structural modifications of the aircraft permitted by the current documentation, revision bulletins, etc.
Avoidable functional wear (ADvu)
thousand$
Unrecoverable functional wear
ADvn = (1 - (N/Na) * (K/Ka) * (V/Va)b * (H/Ha)c + Vn)) * CN/CNa +
+ (1 - (1/τ) / (1/ τa)) * (1-Vn) * (1 - Np) * (Ch * H)/(Cha * Ha)* I
Analogue cost (CNa) - V/700
Passenger capacity
object (N)
analogue (Na)
Seat occupancy factor
object (K)
analog (Ka)
0,6 ¸ 0,7
Cruising speed
object (V)
analog (Va)
Flight hours per year
object (H)
analog (Ha)
Economic life of the sun
object (NL)
analogue (NLа)
As of:
Flight hour cost
object (Ch)
analog (Cha)
Specific fuel consumption
object (τ)
analog (τ a)
Exponent taking into account the type of aircraft ***)
Vn = 1 / (1 + I)NL/H
Income tax rate (Np)
Fatal wear and tear (ADvn)
Functional obsolescence (3.1. + 4.12)
External wear (max (5.1, 5.2))
Sales comparison
Loss of income ***) (increase in price of fuel and lubricants)
Cumulative wear S= F) * (1 - V) * (1 - E) =
1 - [ + 2.3) ] * *
Cost by cost approach
*) - according to the maximum allowable resources, the rest - according to the regulations
**) - Here the object is considered as a long-lived property complex, equivalent to a real estate property, the loss of demand for which is unlikely: I = Ib + Iр = 10% + 2%, Ib - safe rate (on $ deposits), Iр - risk premium, corresponds to the aircraft risk insurance rate.
***) In relation to the indicators "fuel consumption" / passenger * km
The cost of the gliders obtained using the cost approach is:
Introduction
Posted on the website of the Russian Society of Appraisers on the Internet, the author of which is B.E. Luzhansky. In addition to the draft standard B.E. Luzhansky wrote a number of works on the same topic. Of these, the author knows the following:
Methodological support for assessing the market value of aircraft. "Evaluation Issues" No. 4, 1997, pp. 30 - 40.
Assessment report for the Yak-42D aircraft. Golden disc 99 - Encyclopedia of ROO assessment, 1999.
Assessment of aircraft and aircraft. Methodological materials. Moscow, 2000
Section on aircraft assessment in the book "Evaluation of Machinery and Equipment" / Textbook. M: "Institute of Land Assessment", 2000.
All these works describe almost the same technique. The differences are minor.
In the list of his works, B.E. Luzhansky also indicates the “Methodology for assessing the market value of aircraft”, approved by the Deputy. Director of the Federal Antimonopoly Service of Russia on July 10, 1997, to which he refers in other works, including in the report on the assessment of the Yak-42 aircraft. To a request to the State Civil Aviation Service of the Russian Federation whether this methodology is an officially recognized document, a response was received (out. No. 15.7-83GA dated March 12, 2001) on behalf of the Head of the Department of Economic Regulation of Civil Aviation that the GS GA of the Ministry of Transport of Russia does not have legally executed document.
Having more than 20 years of experience in the field of ensuring reliability and increasing the operational efficiency of civil and military aircraft (hereinafter referred to as aircraft) and being a practicing aircraft appraiser, the author considered it possible to offer interested specialists the following analysis of B.E.’s methodology. Luzhansky.
In the section "Scope of Application" of the GOST project "Evaluation of aircraft and aircraft. General requirements" it is stated that the procedure for assessing the cost of aircraft, including aircraft, and their elements, established by this standard, will be required for use in all types of documentation and literature on property valuation that are within the scope of standardization work and (or) using the results of this work.
In February 2000, CJSC "Consulting Agency "Info-Park" sent a letter to the President of the ROO, which contains some reasons of a formal nature that make it inappropriate to use the document in its existing form as a mandatory standard of the Russian Federation. This article discusses the essence of the methodological part draft standard.
The draft standard considers three approaches to aircraft valuation: cost-based, sales comparison and profitable. The main attention, judging by the volume of the text and the details of the description of materials, is given to the cost approach. Below the approaches are discussed sequentially.
1. Aircraft assessment using a cost approach
The method of assessing the market value of machinery and equipment using the cost approach involves, as is known, the following procedures:
Determining the full replacement cost (or, more often, full replacement cost) of the machine;
Determination of cumulative wear;
Subtracting depreciation from the full replacement cost (full replacement cost).
Cumulative wear may include the following types of wear:
Removable physical wear;
Unremovable physical wear and tear;
Removable functional wear;
Unremovable functional wear;
External wear.
Physical deterioration[International Assessment Standards. Book 1, G.I. Mikerin et al. - M.: JSC "Printing House "NEWS", 2000. - 264 p.] characterizes the decrease in the value of property due to the loss of its original properties by its elements. Functional wear characterizes a decrease in the value of property due to its loss of ability to be used for its intended purpose. External wear characterizes a decrease in property value due to changes in environmental conditions.
Removable wear- one whose cost of correction is less than the added value. Fatal wear- one the cost of correcting which exceeds the cost that will be added.
One of the features of aircraft is that, due to significant competition among manufacturers and the emergence of new areas of aircraft application, they are constantly being improved: flight performance, comfort are improved, reliability and durability are increased. From the point of view of assessing the market value using the cost approach, this circumstance is important because when determining the full replacement cost for the aircraft being valued, the task arises of adjusting the cost of a new modern aircraft - an analogue for the difference in its characteristics from the same characteristics of the aircraft being valued. This difference can be characterized in terms of the cost approach to evaluation as the functional wear and tear of the aircraft being evaluated relative to its analogue aircraft. That is, the full replacement cost of the assessed aircraft can be determined by the full replacement cost of the analogue aircraft minus the functional wear and tear of the assessed aircraft relative to the analogue aircraft. This position is reflected in the methodology under consideration in the following formula:
CN = CNb - ADVb (Formula 1)
Where CN- estimated replacement cost of the appraisal object;
CNb- replacement cost of an analogue of the valuation object
ADVb- functional wear and tear of the assessed object relative to its analogue.
Taking this circumstance into account, we will first dwell on the method of assessing the functional wear of aircraft in the method under consideration, and only in terms of irremovable functional wear, with the method of calculation of which the author does not agree.
1.1. Calculation of irreparable functional wear
To assess the irreversible functional impairment of passenger aircraft due to differences in the main flight technical, operational and economic characteristics from analogues, the methodology under consideration uses the formula:
ADvn=CNb((1-Nc*Kc/(Nb*Kb)*(Vc/Vb) a *(Hc/Hb) b)+Vn(1-NLc/NLb Hb/Hc))+(1-Vn) *Do/I (Formula 2)
Where
Vn = 1 / (1+I) NLc / Hc
Do = Hc [ Chc - Chb* Nc * Vc * Kc / (Nb* Vb* Kb)] * (1 - Np)
Where ADvn- functional impairment of passenger aircraft due to differences in basic characteristics compared to similar ones;
CNb- analogue price;
Nb, Nc- passenger capacity of the analogue and the aircraft under evaluation, respectively, with similar passenger cabin layouts;
Kb, Kc- seat occupancy rates of analogue and aircraft;
Vb, Vc- cruising speeds of the analogue and the aircraft being evaluated, respectively;
Hb, Hc
a, b- exponents taking into account the influence of differences in cruising speeds and annual flight hours,
NLc- economic life of the aircraft in flight hours;
NLb
Chb,Chc- the cost of a flight hour of the analogue and the aircraft being evaluated;
Vn- the present value of the monetary unit at the end of the economic life of the aircraft being valued;
I- discount rate;
Do- loss of profit for the year;
Np- income tax rate.
-Nb, Nc- passenger capacity;
-Kb, Kc- seat occupancy rate;
-Vb, Vc- cruising speed;
-Vb, Vc- flying hours per year;
-NLb, NLc the economic life of the aircraft in flight hours;
-Chb,Chc- cost of a flight hour.
There was no step-by-step derivation of the above formula or justification for its structure in the literary sources available to the author. Therefore, below we will re-derive the formula for assessing the irremovable functional wear and tear of income-generating objects from general ideas about this type of wear and tear and it will be compared with formula (2). To derive the formula, the designations of the parameters will be used, if possible, coinciding with the designations adopted in the methodology under consideration.
The draft standard notes the following: “Irremovable functional wear and tear corresponds to deficiencies, the correction of which is currently practically impossible or economically impractical. The most common and justified method for determining irreparable functional wear and tear is the method of capitalizing loss of income or increase in costs (including investment) during operation of the aircraft being assessed from the moment of assessment to decommissioning."
Let's consider how these loss of income and increased costs can be taken into account when calculating irreparable functional wear and tear.
Let us assume that an analogue aircraft is known. Its full replacement cost is known. СNb.
If we focus on the characteristics of the aircraft used in the methodology, we can write the formula for the amount of revenue from operating an analogue for a year in the following form:
Db = Rb * Lb = Rb * Nb * Kb * Vcp.b. * Hb (Formula 3)
Where Rb- revenue per passenger per 1 km of flight distance of a similar aircraft, minus taxes on revenue;
Lb- number of passenger kilometers per year per aircraft;
Nb- passenger capacity (total number of passenger seats in a similar aircraft configuration);
Kb- seat occupancy rate (the relative share of the total number of seats occupied by passengers);
Vav.b- average flight speed;
Hb- flying hours per year.
The costs of operating an analogue for a year can be determined by the formula:
Pb = Wb * Hb (Formula 4)
Where Wb- analogue costs per flight hour.
Hb- flying hours per year.
To estimate specific operating costs, the cost value per 1 flight hour was adopted by analogy with the value adopted in the methodology under consideration Chb the cost of 1 flight hour of the analogue, so that similar parameters are present in the final formula. The author did not use the notation Chb, since in the publications known to him by B.S. Luzhansky does not indicate what types of expenses are included in the amount Chb. In size Wb includes expenses of all types arising during the operation of the analogue (except for expenses associated with the implementation of the aviation business, which relate to the aviation enterprise as a whole).
Net present value after tax for the economic life of the analogue is determined by the formula:
NPVb = Tb e i=0 = [(Dbi - Pbi)*(1 - Np)]/ i + Dpr.Tb/(1 + I) Tb (Formula 5)
Where Dbi- the amount of income in the i -th year of operation of the analogue;
Pbi- the amount of expenses in the i -th year of operation of the analogue;
Dpr.Tb- after-tax income from the sale of aircraft after the end of the economic life of Tb years.
Np- income tax rate;
I- discount rate.
To simplify the form of the formula, it does not take into account depreciation charges that affect the amount of income tax.
With a constant number of flight hours of the analogue per year, the economic life of Tb determined by the formula:
Tb = NLb/Hb where NLb- economic life of the analogue in flight hours;
Hb- flight hours per year equivalent.
In the above formulas (2), (3), (4), the annual revenue from the use of an analogue aircraft and expenses depend on such parameters as:
- Kb, Kc- seat occupancy rates of the analogue and the aircraft being evaluated;
- Hb, Hc- flight hours per year of the analogue and the aircraft being evaluated;
- Chb,Chc- the cost of a flight hour of the analogue and the aircraft being evaluated.
Formulas (3) and (4) also use the parameters Rb- revenue per passenger per 1 km of distance, minus taxes on revenue, and Wb - similar costs per flight hour.
Options Kb, Kc, Hb, Hc, Chb, Chc, Rb, Wb directly related to the external economic conditions of aircraft operation. If the economic situation is favorable, then the parameters determining income and expenses increase; if the situation is unfavorable, then these parameters decrease. In the second case, external wear and tear will occur, leading to a decrease in the market value of the aircraft.
Unfortunately, the author did not find recommendations for choosing parameter levels in the draft standard or other descriptions known to him. Kb, Kc, Hb, Hc, Chb, Chc, introduced into formula (2). When calculating irreparable functional wear using formulas (3) and (4), they should include the values of the parameters R, Kb, Hb and Wb without taking into account their deterioration due to external wear.
If we substitute the parameter in formula (5) NPVb full replacement cost CNb, then we get the equation:
CNb = Tb e i=0 = [(Dbi - Pbi)*(1 - Np)]/ i + Dpr.Tb/(1 + I) Tb (Formula 6)
Solving this equation for the discount rate I, will give a rate value characterizing the risk of investing money in the operation of purchasing a new analogue. This rate can then be used when calculating the value NPVc for the assessed aircraft, as if it were new, since both the assessed aircraft and a new analogue are available to the potential buyer.
Calculation of value NPVc is performed according to formulas (3 - 5), in which the index "b" is changed to the index "c".
The loss of profit due to the worse technical and economic characteristics of the aircraft being evaluated compared to the analogue (i.e., irreparable functional wear and tear of the new aircraft) is calculated using the formula:
ADvn = NPVb - NPV = NPVb * (1 - NPVc/NPVb) (Formula 7)
Where:
Db = Rb * Nb * Kb * Vcp.b * Hb ;
Pb = Wb * Hb;
Dc = Rc * Nc * Kc * Vcp.cb * Hc ;
Pc = Wc * Hc.
The resulting formula for assessing irreparable functional wear and tear was derived by calculating the capitalized loss of net cash flow due to the worse characteristics of the aircraft being evaluated compared to its analogue, based on generally accepted provisions for the assessment of profitable objects, taking into account the theory of changes in the value of money over time. It differs significantly from the formula for calculating functional wear given in the method under consideration.
Let us repeat formula (2) here and compare it with formula (7).
ADvn=CNb((1-Nc*Kc/(Nb*Kb)*(Vc/Vb) a *(Hc/Hb) b)+Vn(1-NLc/NLb*Hb/Hc))+(1-Vn )*Do/I
where Do=Hc*(1-Np)
The first fundamental difference between formula 2 and formula 7 is the absence in the first of them of a parameter characterizing specific income (in formula 7 this is R- revenue per passenger per 1 km of aircraft flight distance, minus taxes on revenue). Let's imagine a simple example. The assessed aircraft has an economic life that is 5 years less than its analogue aircraft. This means that the aircraft under evaluation has irreparable functional wear and tear, since its duration of receipt of net cash flow is 5 years shorter than that of its analogue aircraft. Net cash flow is equal to the difference between income and expenses, therefore, the parameter of specific income, in the author’s opinion, should be present in the formula for calculating irreparable functional wear and tear.
In formula 2, the factor in double parentheses consists of one and two terms. The discounting procedure applies only to the second term. The author cannot find an explanation for this, since the parameters of the first term determine the ratio of income during the operation of the aircraft, the difference of which must be capitalized over the service life.
Profit loss parameter for the year - Do appears only in the last part of the formula. At the same time, it is not clear why the loss of profit is caused only by expenses: Chb, Chc (cost of a flight hour), but it is not affected by differences in income when operating both aircraft. In addition, according to formula 2, it is assumed that the levels of loss of income Do will be constant throughout the entire economic life of the aircraft, although in fact this is only one of the special cases. For example, unit costs may increase as the aircraft approaches the end of its service life.
After calculating the functional wear and tear, the method determines the total cost of replacing the aircraft being assessed, i.e. the cost of a new analogue aircraft if it had the characteristics of the aircraft being evaluated.
CNc = CNb - NFUs - UFUs (Formula 8)
Where CNс- estimated total replacement cost of the aircraft being assessed;
CNb- full replacement cost of the analogue;
NFUs- irreparable functional wear of the aircraft being evaluated relative to its analogue;
UFUs- removable functional wear of the aircraft being evaluated relative to its analogue.
The next stage of the assessment is the calculation of the physical wear and tear of the aircraft being assessed in relation to the new aircraft, the estimated total replacement cost of which is equal to CNс. Typically, the largest share of physical wear is irreparable wear, so the methodology for assessing this type of wear is discussed below.
1.2. Calculation of irreparable physical wear and tear
To assess the irreparable physical wear and tear of an aircraft and its elements, the analyzed methodology uses the “effective age” method, as a result of which the wear and tear turns out to be equal to the expended share of the economic life of the object in question (the aircraft or its element):
Fn = (NL - RL) / NL = EA / (EA + RL) (Formula 9)
Where: Fn- degree of irreparable physical wear;
NL- economic life expectancy;
R.L.- length of remaining useful life;
E.A.- effective age.
This method of calculating depreciation is the simplest, however, its use for expensive profitable objects, which include aircraft, can lead to significant errors in estimating their market value. This circumstance is aggravated in relation to the aging fleet of domestic aircraft, for which irreparable physical wear is usually the greatest compared to the values of other types of wear.
To consider the issue of assessing irreparable physical wear of an aircraft, let us return to the definition of wear of this type. Physical wear and tear characterizes the decrease in the value of an object due to the loss of its original properties by its elements. Irremovable physical wear and tear characterizes the irreparable loss of an object’s original properties. This is expressed in a decrease in the upcoming service life of an object before its decommissioning compared to the service life before decommissioning of a new object. When purchasing a profitable property, its buyer usually pays money for the cash flow that he will receive in the future during the operation of this property. The shorter the remaining life of the object, the shorter the specified flow will be.
Consequently, a measure of the irreparable loss of an income-generating object of its original properties (a measure of irreparable physical wear and tear), in the author’s opinion, can be recognized as a decrease in the current value of the cash flow (excluding the costs of maintenance and repairs) from the upcoming operation of the object, compared with the current value such a stream for a new object.
Let's consider this using the following conditional examples, where, in order to simplify the problem, we analyze a profitable object that has only irreparable physical wear and tear.
Example 1
Let there be an object, the total replacement cost ( PVS) which is equal to 1795 units. Of these, 538 units. - cost of short-lived elements (CL), 1257 units. - cost of long-lived elements ( J). The full economic life of an object is divided into 75 time intervals. Substitutions QoL are made after 25 and 50 intervals have been completed. The value of the object after the end of its economic life is 100 units. There is no functional or external wear.
The following figure shows graphs characterizing changes in the value of an object as its age increases. Calculations were performed using the “effective age” method. One of the graphs shows the change in cost J, on the second, the change in the value of the object as a whole. The sawtooth shape of the second graph is due to the gradual decrease in cost QoL before the deadline for their replacement is reached and the value of the object increases abruptly immediately after replacement QoL. After the end of its service life, the cost of the object is 100 units.
In this model, the degree of wear is directly proportional to the effective age DJ and QOL, which are often equated to their actual age. The resulting linear depreciation model does not agree with ideas about the actual degree of decline in the usefulness of a profitable object as the remainder of the economic life of the object decreases. This can be illustrated by the following example.
Example 2
Let the operation of a certain object generate an annual income of 50 units. Costs excluding replacement costs QoL equal to 13 units. The economic life span is divided into 75 time intervals. Substitutions QoL are made after 25 and 50 intervals have been completed. Price QoL- 538 units. The value of the object after the end of its economic life is 100 units. There is no functional or external wear. Some of these parameters are specifically chosen to be equal to the parameters of Example 1.
The market value of such an object when assessed using the income approach can be calculated using the formula:
PC = DDz - DDad.z - DRrem.z + DDpr.z (Formula 10)
Where z- the number of years equal to the economic life of the object;
DDz- capitalized actual gross income for z years of future operation of the facility;
DROP.z- capitalized costs (excluding replacement costs QoL) for z years of upcoming operation of the facility;
DRrem.z- capitalized replacement costs QoL for z years of upcoming operation of the facility;
DD pr.z- capitalized net income from the sale of an object after the end of its economic life (reversion).
Quantities DDz, DRop.z, DRrem.z, DDpr.z can be calculated using the formulas:
(Formula 11)
DDz = z e i=0 Di / (1 + I) i ;
DDop.z = z e i=0 Pop.z / (1 + I) i ;
DDrem.z = z e i=0 Rem.i / (1 + I) i ;
DDpr.z = Dpr / (1 + I) z ;
Di- predicted actual gross income in the i -th upcoming year of operation of the facility;
Rop.i- projected costs (excluding replacement costs QoL) in the i -th upcoming year of operation of the facility;
Rrem.i- projected replacement costs QoL in the i -th upcoming year of operation of the facility;
DPR- net income from the sale of an object after the end of its economic life;
I- discount rate.
The cost of an object similar to the one discussed above, but already in use, can be determined using formulas 10 and 11, if we replace the period z with the period w remaining until the end of the economic life of the object (the value of the discount rate I is taken to be the same, since the investor has access to the one under consideration, and a new object):
PCw = DDw - DRop.w - DRrem.w + DDpr.w (Formula 12)
If you carry out the operation of capitalizing income and expenses at a discount rate I = 0%(in this case, capitalization will be a simple summation of income and expenses), then we get a graph of a gradual decrease in the market value of the object as its age increases, shown in the following figure (graph 3). Here we repeat the graph of changes in the residual value of the object, calculated using the traditional algorithm of the cost approach (graph 4). At the same time, the value of the total replacement cost of the object PVS and the market value of the new object, calculated by the income approach, are the same. As you can see, both of these graphs coincide not only at the point PVS, but for all values of the object’s age. It follows that the calculation of irreparable physical depreciation using the "effective age" method does not take into account the theory of changes in the value of money over time.
Let's assume that the duration of the time interval is 1 quarter and the discount rate is 5% quarterly. In this case, the economic life of the object in 75 time intervals is approximately 19 years, and the discount rate corresponds to approximately 20% per annum. For this case, below is a figure containing a comparison of the results of assessing the market value of a certain object using the cost approach and the income approach, provided that during the operation of the object the levels of income and expenses in each time interval (except for replacement costs QoL) will be constant. Values of full replacement cost PVS object and the market value of the new object, calculated by the income approach, are the same. Along the ordinate axis, parameter values are measured as a percentage of the value PVS object.
The figure shows a significant difference (Graph 5) between the results of assessing the value of an object using the profitable (Graph 3) and cost-based (Graph 4) approaches, especially for large values of the age of the object (the maximum difference is 30% PVS). That is, the market value of an object, calculated by the income approach under the above initial conditions, decreases less intensively as the age of the object increases than when it is calculated by the cost approach.
The following figure shows graphs of changes in the market value of an object, provided that the level of income decreases by 0.5% in relation to income in the previous time interval. In this case, the market value calculated by the income approach began to decline more intensively as the age of the object increased (the maximum difference between the valuation results of both approaches is 10% PVS).
If you increase the discount rate or the duration of the economic life of an object, then the difference in the results of assessing the market value obtained by the income approach and the cost approach in its given implementation will increase.
Based on the above, we can conclude that in order to ensure a more correct calculation of market value using the cost approach, it is advisable to use the theory of changes in the value of money over time in relation to accounting for total depreciation, and not just functional and external depreciation. For this, the algorithm described below can be used.
Let us assume that there is a more perfect analogue of the object being valued; in addition, both of them are subject to external wear and tear. The object being assessed is not new. Thus, it has functional wear in relation to its analogue, physical wear due to accumulated age and external wear.
Full replacement cost PVA analogue includes the costs of its creation, as well as the manufacturer’s profit. The amount of profit depends on market conditions. When demand for these objects is high, it is high; when demand is low, it is small. For a profitable object, demand is stimulated by an increase in the profitability of the objects, i.e. external reasons. When profitability decreases due to external reasons, demand decreases. A situation may arise when, due to a sharp decrease in the profitability of objects, their primary market will disappear, since it will not be profitable to purchase new objects.
Let us assume that the primary market exists and the price of new analogues on it is equal to PVA. Correlating the value PVA and clean flow Chda funds that would be created due to the operation of the analogue until the end of its economic life, it is possible to determine the internal rate of return that justifies the advisability of purchasing a new analogue. To do this, it is enough to solve the following equation for rate I:
PVA = z e i=0 [BDAi/(1+I) i ] + [Dpr.a/(1+I) z ] (Formula 13)
Where ChDai- net income after taxation in the i -th upcoming year of operation of the analogue (excluding external depreciation);
z- economic life of the analogue;
Dpr.a- net income after tax from the sale of an analogue after the end of its economic life.
In this case, the pure flow Chda cash takes into account, among other things, loss of income due to external wear and tear of the analogue.
If there is no primary market for analogues due to too much external wear and tear of analogues, then the internal rate of return I can be determined using formula 13, but the net flow is Chda cash and income Dpr.a must be determined without taking into account losses due to external wear.
Some aircraft, such as commercial aircraft, can cost many millions of US dollars. If the most typical scheme for purchasing an aircraft of the type in question involves taking out a loan, then the parameter ChDao at i = 0 is equal to the amount of the loan received, and the amount ChDai subsequent years should take into account loan payments.
Typically, the manufacturer establishes a warranty period and service life for new aircraft, within which the plant eliminates detected defects on the aircraft free of charge for the organization operating the aircraft - the operator. In this regard, the operating costs of the operator after the end of the warranty will be higher than during the warranty period. Because of this, and also due to the increased risks when purchasing an aircraft not from the manufacturer, but on the secondary market, there is a noticeable drop in the market value of the aircraft after its transfer to the secondary market, even with very little operating time. As a consequence of this, in order to be able to compare the evaluated aircraft, which belongs to the secondary market, with an almost new aircraft, also transferred to the secondary market, instead of formula (13), you can use the formula:
RSA.v.r. = z e i=1 [БДаi/(1+I) i ] + [Dpr.a/(1+I) z ] (Formula 14)
Where RSA.v.r.- the market value of an analogue aircraft transferred to the secondary market after the end of the manufacturer’s warranty period;
ChDai- net income after taxation in the i -th upcoming year of operation of the analogue, measured from the end of the manufacturer’s warranty period;
In this case, we get the discount rate I, characteristic of the secondary aircraft market.
PC = w e i=0 [BHi/(1+I) i ] + [Dpr/(1+I) w ] (Formula 15)
Where BHi- net income after tax in the i -th upcoming year of operation of the assessed object;
w- remaining service life of the assessed object;
DPR- net income after tax from the sale of the valued object after the end of its economic life;
I- discount rate determined above when analyzing analog data.
If the assessed object, in terms of its technical condition as of the effective date of assessment, does not meet the requirements of regulatory documentation for its continued operation or is unmarketable, the costs of eliminating these deficiencies should be taken into account in the above formula as a negative value BH i at i = 0.
This calculation algorithm in a more simplified form was described by the author in 1995 in the Methodological Recommendations [Assessment of the cost of operated aircraft, water transport, land vehicles, their components and assessment of the cost of damage caused to them in the event of insured events. Guidelines. Recommended for use by the methodological council "EXO" of the Russian Chamber of Commerce and Industry, 1995. Author: Ph.D. Zaitsev Yu.S.]. Then it was used in the module for assessing the market value of aircraft, which is part of the Gamma-Garantiya series of software modules for the valuation of property with probabilistic analysis, registered with ROSAPO in 1998 under No. 980504.
The described calculation algorithm may seem too far from the commonly used algorithm for the cost approach to valuation, since it does not highlight the types of wear on the object. However, in the author’s opinion, the level of detail in the calculations must satisfy the conditions of necessity and sufficiency to obtain the final assessment result. There is no need to go into greater detail in the calculations if this does not increase the accuracy of the final result, but may even reduce it.
One might wonder how this approach differs from the income approach or the sales comparison approach? The income approach involves the capitalization of cash flows expected from the operation of the object in question. In this case, the discount rate is determined by the cumulative construction method or the extraction method, focusing on objects secondary market. The sales comparison approach involves assessing the market value of an object based on an analysis of its differences from analogues offered for sale. secondary market, the characteristics of which, including age, are selected as close as possible to the characteristics of the object being assessed. Estimating the market value of an object using the cost approach involves using cost as a starting point new object. Thus, the main difference between the cost approach and the other two is obviously that in it the basis for assessment is a new object, and not secondary market objects. This circumstance is taken into account in the above algorithm.
Additionally, we note the following in this regard. The methodology for determining physical wear and tear, which is directly proportional to the service life of objects, corresponds to some accounting provisions that are of a formal, strict nature. However, assessing the market value of objects requires the use of more flexible methods that are suitable for taking into account the incentives of investors.
The final decision on the market value of objects is made by agreeing on the valuation results obtained by each of the three mentioned approaches. In practice, quite often these results vary significantly. Particularly noteworthy are the cost estimates obtained using the cost approach. It can be assumed that one of the reasons for this is the discrepancy between the traditional algorithm for implementing the cost approach to valuation and investors’ ideas about the factors that determine the usefulness of profitable objects. The author believes that if the algorithm described in this article is used, the severity of the problem of differences in assessment results obtained by different approaches should decrease.
It should be noted that the process of decreasing the market value of assets as their age increases, taking into account the decreasing residual ability of assets to generate cash flows, is described in other publications, in particular, in the book [Gribovsky S.V. Valuation of profitable real estate. -SPb: Peter, 2001. - 336 p. with ill. - (Series "Textbooks for universities")].
2. Aircraft assessments using the sales comparison approach
To evaluate the sales comparison approach in the method under consideration, it is recommended to adjust the known price of an analogue aircraft for differences from the evaluated aircraft in terms of the degree of physical wear, flight performance, operational and economic characteristics using formulas used within the cost approach. Since these formulas (they were analyzed above) do not reflect, in the opinion of the author, the basic principles of evaluating profitable objects, therefore, there is no confidence in the correctness of the results that can be obtained when using them within the framework of the sales comparison approach.
3. Valuation of aircraft using the income approach
The section of the methodology under consideration, devoted to the income approach to valuing aircraft, does not reflect any features of this approach when applied to valuing aircraft in comparison with other profitable objects.
conclusions
1. The methodology for assessing the market value of aircraft (AC), described in the GOST project "Assessment of aircraft and aircraft. General requirements" and in a number of other works by B.E. Luzhansky, contains a mathematical apparatus for calculating the functional wear of an aircraft within the framework of the cost approach , the method of formation of which is not explained in the open press. As a result of a step-by-step analysis with evidence and examples based on the general principles of the theory of valuation of profitable objects, the author obtained a formula for assessing functional wear and tear, which differs significantly from the formula proposed by B.E. Luzhansky. This circumstance indicates the need for public protection of the methodology used in the draft standard, or its correction.
2. The article shows that the use of the “effective age” method to assess the irreparable physical deterioration of an aircraft, based on a linear model of the dependence of the amount of wear on the age of the object, can lead to a significant error in the results of assessing the market value of the aircraft. A calculation algorithm is described that makes it possible to more adequately take into account the decrease in the degree of profitability of an object as its age increases than is possible with the “effective age” method.
3. The correctness of the results of evaluating aircraft using the approach of comparing sales using the methodology described in the draft standard is questionable, since the adjustment of prices of analogous aircraft, taking into account the difference in their flight performance and age characteristics from the same characteristics of the aircraft being evaluated, is carried out using the same formulas as proposed for assessing functional and physical wear and tear, and which are analyzed above.
4. The section of the draft standard devoted to the income approach to valuation does not contain a description of any features of aircraft in comparison with other income-generating objects belonging to the “machinery and equipment” category.
5. In conclusion, the author considered it necessary to once again emphasize that the creation of standards and methodological materials that can really be useful in the work of practicing appraisers and regulatory authorities is impossible without the joint serious work of interested specialists and extensive discussions of drafts of such documents in the press and at specially organized scientific -technical advice.
Zaytsev Yu.S., Head of the assessment department of the INFO-PARK Consulting Agency, Candidate of Technical Sciences
tel. 254-4567, 254-7026, E-mail:
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