Fair Market Value In Place is the professional opinion of the most probable price of the market value of assets expressed in terms of currency. This exchange of assets for currency is between a willing buyer and a willing seller. Neither the buyer nor the seller is under any duress to buy or to sell the assets. Both parties have reasonable knowledge of relevant facts. The assets that are sold under a Fair Market Value In Place scenario are to remain in place and be functional. All the assets which have been specifically designed and/or built will remain to be utilized in the way in which they were originally intended.
This definition does not take into deliberation the past, present, or forecasted income, generating performance of the product lines made. It should be comprehended that In Place appraisals do not allow for historical or future earnings potential. This is because the In Place appraisal is an estimate of limited scope.
Shortage of good sales information, leads In-Place appraisals allowing for the value of the personal property as individual assets. Although, further consideration is given to such costs as the estimated contributory value of depreciated installation, and other costs such as site improvement and transportation.
It should also be noted that the In-Place evaluation is subjective. That is, it assumes the sum of the parts is equal to the whole. While this assumption's validity is in question, it cannot be proven without taking in the factors that lay outside the scope of the evaluation.